Hidden Implications of Microsoft's OFX 2.0 Announcement
Summary: Microsoft's announcement of Open Financial Exchange (OFX) 2.0 has caused confusion in an emerging bill presentment and payment (BPP) industry that has been trying to promote interoperability.
Event: At the recent BAI Retail Delivery Show in Las Vegas, TransPoint, a company owned by Microsoft, First Data and Citigroup, announced that five home-banking solution providers will join its Technology Associate Program, which enables associates to develop software that integrates with TransPoint's Internet billing and payment system. Buried inside the announcement was an even more significant statement that the partners would use the new OFX 2.0 to integrate their offerings with TransPoint's.
First Take: Microsoft has pushed the envelope by introducing an OFX version based on XML, while its OFX co-owners, Checkfree and Intuit, are busy finalizing OFX 1.6 based on SGML. OFX 1.6 will be used to manage BPP at www.quicken.com, the most popular personal financial
Web site. Microsoft apparently went outside the partners' established OFX revision process by announcing OFX 2.0, and has been asked to stop calling this version "OFX."
OFX 2.0 poses a timing issue for Checkfree and Intuit, which first need to stabilize OFX 1.6, and a dilemma for BITS, the technology arm of the Bankers Roundtable, which is trying to manage a standards process that reduces risk for industry participants. BITS has been working on yet another standard, the Interactive Financial Exchange, that combines and improves on the OFX and Gold standards.
BPP standards are critical because they enable interoperability between billers and financial institutions. However, the hidden truth is that OFX for bill presentment is rarely used today, although it will be used more extensively in the future. Further, TransPoint has yet to go into production.
The contractual interpretation of what has occurred among the OFX owners will surely be left to the legal authorities. This event is significant because it confuses a fledgling industry. The only
ones likely to benefit are home banking and biller solution vendors, which will be needed more than ever to translate multiple BPP protocols operating on the Web.
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