Here is the article in Red Herring. They certainly are getting some favorable press coverage.
redherring.com
The banks strike back
By Owen Thomas
Red Herring Online
April 16, 1999
In a turnabout, the big portals are finding themselves the underdogs. Banks are seizing the advantage in the race to win over customers for online financial services -- and portals are racing to catch up.
Bank of America (BAC) announced Wednesday a major pilot project to provide banking, bill payment, and bill presentment (the capability to receive and see bills online before paying them). The pilot will reach Bank of America's California online banking customers by the end of the year.
And Bank One (ONE) announced that it had partnered with the Integrion Financial Network, a technology consortium backed by IBM (IBM) and CheckFree (CKFR), to provide Web-based bill presentment today to its online banking customers.
STANDARD FARE
Standards are making it easier for banks to build their own services, instead of relying on technology partners.
Bank of America is taking it a step further by going after the billers that now provide aggregators like CheckFree with the bills that customers receive and want to pay online. To do so, it developed a system in-house that used the Open Financial Exchange (OFX) standard developed by Microsoft (MSFT), Intuit (INTU), and CheckFree.
According to group executive vice president Chris Callero, Bank of America hopes to expand its cash-management relationships with businesses to provide bill-hosting services as well -- a first for a large U.S. bank. To date, banks have only provided bill payment services. Bill hosting means the bank stores the data associated with a bill and makes it accessible to the consumer.
"We do business with two out of three businesses," says Mr. Callero. "So we're already talking to them."
According to Jane Wallace, a senior vice president heading up Bank of America's bill payment and presentment services, the bill-hosting service was motivated partly by its internal needs.
"Bank of America is already a large biller, and we wanted to host our own bills," Ms. Wallace says. "We wanted to make sure whatever service we offered to our wholesale customers was industrial-strength, tried and true."
But OFX support in Bank of America's products means it can also host bills from any biller with an OFX server; billers don't need to be the bank's customers.
"With 1 million online banking customers, we'll need to pick up bills wherever they are," says Ms. Wallace. "Conversely, for the biller customers, we'll be able to be the pipeline to distribute those bills wherever their customers are."
PORTAL AND THE HARE
One place those bills might go is to the large Internet portals, which have jockeyed to expand their financial services. To date, however, they seem to be lagging behind the banks' efforts.
Yahoo (YHOO) and CheckFree's partnership appears to be stalled, with little progress made since CheckFree reported in January that it had struck a $6 million distribution deal in "a major Internet distribution contract." (After much speculation in the press, the Red Herring Online identified Yahoo as the partner when it reported the existence of a test site run by Yahoo that linked to CheckFree.)
At present, Excite (XCIT) and Intuit still partner to provide consumer financial content. But Excite has chosen Bank One to provide more lucrative online banking and billing to Excite's 17 million-some online users.
The status of Bank One's deal with Excite is unclear, however. The companies plan to offer Bank One subsidiary First USA's credit cards, online banking, and online bill paying and presentment to Excite's customers, but none of those offers are available on Excite's network today.
Lycos (LCOS) and Infoseek (SEEK) are both planning major revamps to their personal finance sites, but have yet to strike deals with major banking or financial content players.
A new wild card could be BillServ.com (OTC BB: BLLS). To date, the San Antonio-based company has focused on helping small billers put their bills online; it partners with CheckFree to help companies that can't afford the cost of implementing CheckFree's custom software send their bills to CheckFree and other billing aggregators.
But this week, BillServ announced it was building its own bill-payment portal, Bills.com. According to company founder and senior vice president David Jones, BillServ.com recently acquired the domain name for $75,000, and it plans to launch the site in three to six months.
That's a long way off in a fast-moving market. But Mr. Jones feels there's room for another player. "There are a lot of consumers who don't use Yahoo, and aren't Bank of America or Bank One customers," he says. "We do feel that a year after launching the site, we could have a million subscribers."
All camps have a lot at stake: The banks want to keep their customers loyal, while the portals want their users to spend more time at their sites and engage in more lucrative transactions while there. And middlemen like BillServ.com and CheckFree want to make sure they have a role in bringing billers and consumers together.
It's not clear who will rake in the money, but one winner is already likely: the consumer. With free PCs and free Internet service in the air, is free online banking so far off?
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