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To: Ron S who wrote (7676)	7/3/1999 2:11:00 PM
From: Erik T	Respond to of 20297

Don't recall this being posted: Warning Bells Sound for Banks Not Aboard When E-Bill Ship Sails The warnings were apocalyptic at the recent American Banker-sponsored conference on electronic bill presentment and payment in San Francisco. By Ross Snel Jun. 1, 1999 - American Banker - Bankers who had not yet embraced this new business opportunity were told they had better act fast-or else. "In three years, a lot of banks won't be around, unless they're more aggressive in this arena," said Robert J. Smik, vice president of operations at USABanc.com, a Philadelphia banking company that recently added the "dot-com" to its name to reflect its aggressive Internet plans. "Bill presentment is indeed a killer (application) and the banks that don't play simply won't be around five years from now," said William M. Randle, executive vice president of Huntington Bancshares in Columbus, Ohio. Threats may gather on two fronts, retail and wholesale, according to conference participants. Web portals and electronic brokers that gather bills could draw consumers'attention-their "eyeballs," in the lexicon of the day-away from the banks. On the wholesale side, electronic presentment and payment could erode banks' lockbox businesses, as payments flow through outside processors. June Felix, senior vice president of Chase Manhattan Bank's treasury management group, joked that her bank is motivated by "fear and greed" to help corporate clients implement electronic billing. Noting that a significant portion of Chase Manhattan Corp.'s revenue comes from payment processing, Ms. Felix said the "fear" is of losing traditional cash management business. The "greed" centers on maximizing revenue and strengthening corporate customer relationships with electronic billing services. Some skeptics questioned the value of banks' getting involved in business-to-consumer electronic billing. Gary B. Meshell, executive vice president of Benton International, a Perot Systems Corp. consulting unit, said unless a bank is willing to get into the business of aggregating bills for consumers, electronic bill presentment revenues do not appear promising. "Everybody is doing this because everybody else is," said a banker during a casual moment at a conference reception. "I just don't think the average consumer will want to do this," preferring instead to take advantage of check float. (The issue of check float makes billpay at portals more attractive, I think. Customer retains float unlike paying at the bank. Wells currently debits my account as soon as the payment is made, several days before the biller gets my money!) Mr. Meshell, though, is a forceful booster of electronic business-to-business billing. He said banks can play a key role in helping businesses to streamline complicated processes and integrate payments with traditional lockbox businesses. Electronic billing is just one application that brokerage firms could use to grab business from banks, said Bill Burnham, senior analyst for electronic commerce at Credit Suisse First Boston. "All of the on-line brokerages will get involved in a wide range of banking offerings," Mr. Burnham said. "The battle between the banks and the brokerages will be one of the biggest of the early 21st century." Mr. Burnham raised eyebrows with a prediction that third-party bill consolidators like CheckFree will have a limited life span as the Internet evolves. "We believe the prospects for consolidators as a business model are very poor," he said. With development of open standards for exchanging data, banks and portals will be able to ply the Web for bills from companies and the vendors who help them format the bills electronically, Mr. Burnham said. As the Web becomes a large "distributed data base," the need for consolidators to gather billing data and disseminate it to sites for consumer viewing will wane. Consolidators hoping to enhance long-term prospects should move toward helping billers to format their data or become more like portals, aggregating bills for consumers. "Standing in the middle, in our opinion, is a losing proposition," Mr. Burnham said.

To: Ron S who wrote (7676)	7/3/1999 2:24:00 PM
From: Erik T	Respond to of 20297

Exerpts from some press Feb '99: But TransPoint and CheckFree executives point out that banks have not seized the opportunity to sign up billers. "Anytime a financial institution is ready to sign up billers, and we're hoping that will happen, we'll work with it to bring those billers online," says CheckFree's Lewis. "But few banks have shown any interest in doing that. Rather than wait for banks, we're aggressively signing up billers." Lewis argues that the job of contacting national players and developing the capability to present a large number of bills is an enormous task that only about a half-dozen banks are capable of doing themselves. More banks, however, could sign up a few major local billers and then work with CheckFree to gain access to others, he says. One company that does not intend to compete with TransPoint and CheckFree in bill presentment is Milwaukee-based M&I Data Services, a data processor that in mid-January acquired a bill payment company from Travelers Express Co. M&I already has an alliance to work with TransPoint. Executives say M&I will consolidate bills it receives from the commercial banking side of its clients, but then pass them to TransPoint for presentment. M&I will provide bill payment services for more than 700 institutions as the result of the acquisition. And some banks may work through a coalition. Several institutions have hired consulting firm Benton International Inc. to advise them about forming a bank-owned corporation to develop the technology. Gary B. Meshell, a consultant with Benton's New York office, says banks are now talking about forming two separate coalitions: one for very big national banks, those with assets of more than $100 billion, and one for regional banks, with assets between $20 billion and $100 billion. And while both groups are looking to offer consumer products, Meshell concedes the greater interest is on the business-to-business side of bill presentment. "That's where the most money can be made," he explains. "There is a larger payment flow and a lot more value-added services you can offer and the billers are willing to pay big fees to get them." Still, not every banker is sold on the notion of forming a coalition. "Banks have not had a good track record of bringing about new entities in this industry," says one banker who declines to be identified. "The problem with these coalitions is that each bank typically has a different objective, and it's hard to develop a cohesive strategy." edocs.com