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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: D Mueller who wrote (2475)	2/10/1999 8:14:00 AM
From: Benny Baga	Read Replies (1) \| Respond to of 20297

>>>My "at a glance' concern is that if the trend were to take hold it could seriously impact Checkfree's processing economies and jeopardize their pricing structure. KeyCorp has been stripping out "on-us payments" for some time, and has complained to CheckFree about its pricing structure (subscriber based, not transaction based). Bank One is also doing this today, I believe "on-us payments" amount to around 10 - 15% of the total transactions. For the most part I believe banks see stripping out these payments as some sort of leverage over CheckFree (I do not), but banks will soon realize that CheckFree is not a threat, the E*Trade's, Schwab's and Yahoo!'s of the world are the real Threats. I believe CF will eventually move to a different pricing structure, but not for a while. Pete has some strong opinions on this subject, as well he should, since CheckFree is barely turning a profit. Benny(IMHO)

To: D Mueller who wrote (2475)	2/10/1999 9:17:00 AM
From: Charlie Smith	Read Replies (1) \| Respond to of 20297

D: Legitimate concern. "Globally, institutions issue 40% to 50% of all bills," said Richard J. Bell, senior analyst at Tower Group. Banks, he said, issue monthly bills for credit card, mortgage, and car loans, and "some portion of the payments that banks receive will be payable to them." With the proper software, banks can process these "on-us" payments. They can then route more difficult payments, such as those intended for noncustomers, to outside providers. Translation: A number of high volume customers, by "paying themselves" strip these payments out of the system, and CKFR gets left with higher cost, lower volume jobs, including the dreaded "exceptions" which send costs through the roof. As I've said before, in the bank arena, in house processing will not go away. We need to answer the "some portion" questions NOW because they directly impact market growth. What fraction of the payment stream do FIs account for? How many can realistically do it themselves? What made a flagship customer like Countrywide decide to go w/CKFR instead of doing it in house? Charlie