The Atlanta Journal and Constitution
Ernest Holsendolph Column
April 13, 1999
Atlanta Journal and Constitution, Georgia : Apr. 12--CHECKFREE PHENOMENON SHOWS CHANGING OF GUARD: I always find it arresting to see signs consumers are gradually taking to the idea of paying bills electronically, finally, thus getting around the fuss and paperwork of paying by check. Getting people to do that was always a dream of some bankers. I can recall Chase Manhattan and others 30 years ago promoting a form of checkless transaction dubbed electronic funds transfer.
I can recall later, in the early 1980s, trying out another system co-sponsored in Cleveland by National City Bank and Ohio Bell. It involved a clumsy contraption you attached to your phone, and if everything went well, which happened occasionally, you accessed your account and paid bills. Actually, you authorized the bank to pay the bills, a kind of electronic check that was a step away from direct payment.
I struggled with it for a week, and laid it aside.
It never went anywhere. Many concluded people weren't ready, and most likely were basically not wild about paying faster, let alone more conveniently.
When I read last week about the highflying stock of CheckFree, the Norcross company leading the industry in processing bill payments via the Net, I realized people are changing and Wall Street is getting excited about it.
Like everything on Wall Street, however, there was more than one way to interpret the steep climb of CheckFree Holdings Inc. stock, and it could well be more of the Internet mystique at work. That mystique, as I see it, holds that anything that seems to have promise is worth a heavy bet, the better to catch the leading edge of what could be a wave. That explains why so many Internet companies are popular with investors even though they have yet to be profitable.
CheckFree has had several profitable quarters, but no earnings pattern. CheckFree, as Yogi Berra might say, is a company whose future is ahead of it.
Gartner Group, a consulting firm in Stamford, Conn., says currently only about 9 percent to 14 percent of the 15 billion consumer bills paid each year are handled electronically, with most of that done through direct debits from banks for mortgages, insurance payments and the like.
That suggests we have yet to take the full plunge.
It will be interesting to learn to what extent electronic banking is done by the "early adopters," the mostly youngish people who will do anything if it involves a computer -- or whether older people are changing their habits.
Not surprisingly, the banks all advertise the availability of online banking, but specialists say those services are often not much more easy to employ than the old system that turned me off.
Several banks, Wells Fargo being one of the most prominent, are moving toward Web-based banking, and that company's recent success in enrolling 150,000 online customers seemed to underline the solid nature of the trend.
First Union reports it tripled its online customers last year and now has "hundreds of thousands" of such customers. It would not give the specific number.
Terrie O'Hanlon, CheckFree's senior vice president for communications, probably has it right.
Paying bills online seems linked to the growing popularity of buying online with credit or debit cards through such prominent services as Amazon.com, which sells books and records, and the various services for trading stocks online.
It probably is not so much an urge to pay bills quicker or even more easily, just a growing shift in style that comes naturally to the young and is gradually overtaking even the older folks.
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