Payment Processors and Billing Consolidators

Originate electronic payments and/or host electronic billing statements on their Web.

 

 

 

 

CFI Proservices

Rusty Beckel, VP Electronic Banking

400 SW Sixth Avenue, Suite 200

Portland, OR 97204

Phone: 800.274.7259

Fax: 800.815.5595

E-mail: RBeckel@cfipro.com

Web: www.cfipro.com

Bill Payment Volume: Processed 225,000 payments month, more than double last fall’s 100,000 per month, and expected to grow 8-10% per month into 1998.

Status Report: CFI’s subsidiary, Vendor Payment Systems (VPS), processes bill payments for CFI’s installed base of 200 Personal Branch clients.

Bill Presentment Plans: Nothing specific announced. Many developments coming next year for its Web version of Personal Branch, WebPB, which could include bill presentment.

 

 

 

Checkfree

Pete Kight, CEO

Mark Phelan, EVP Business Commerce

Ken Benvenuto, EVP Retail Services

8275 North High Street

Columbus, OH 43235

Phone: 614.825.3000

Fax: 614.825.3104

Web: www.checkfree.com

Bill Payment Volume: Processed 7 million payments last month, 50% of which were electronic. The first month that Checkfree has hit the 50% electronic mark. According to its Nov. 13, 10-Q filing, Checkfree had 2 million bill pay users on Sep. 30, 1997, a 74% increase compared to 1,125,000 users on Sep. 30, 1996. Both numbers include users from Intuit Services Corp. Because of the relative newness of its subscriber base, the average number of payments per user was just 3.5 last month.

Status Report: During 1997, Checkfree acquired Intuit Service Corp. in a stock transaction. Intuit still owns 10.6 million shares of Checkfree, or 19.1% of the company according to Checkfree’s 9/26/97 proxy. Checkfree also entered into an incentive-laden 10-year deal with Integrion that included taking over the bill payment function previously performed by Visa Interactive. Checkfree now processes payments for more than 277 financial institutions, including nine of the country’s top 10 bank holding companies. The 277 financial institutions have a combined total of 150 million checking and savings accounts. What more can we say?

Bill Presentment Plans: Checkfree has emerged as the initial front runner in electronic bill presentment, inking deals with 21 of the nation’s top 100 billers. Though many of those are small-scale pilots.

 

With its close ties to Integrion and its 18 giant bank owners, Checkfree appears to be the de facto standard for large banks. About a dozen billers are currently presenting bills at Checkfree’s site. Four days after the bill is presented, a reminder e-mail is sent to any user who hasn’t viewed the statement.

In terms of pricing, it looks as though Checkfree and MSFDC will both pony up a few pennies per transaction to the host bank (the bank servicing the user’s checking account). The benefits of those pennies are more cerebral than financial. Even if 40% of the country’s bills (7 billion) were paid electronically, Checkfree/MSFDC would pay only $140 million per year to banks in interchange. Across 80 million bill paying households in the U.S., that only amounts to $0.15 per household per month. A drop in the virtual bucket.

 

Citibank

Norm Bloomberg, VP Home Banking

500 W. Madison

Chicago, IL 60661

Phone: 312.627.5248

Web: www.citibank.com

Bill Payment Volume: 1 million payments per month (OBR estimate plus or minus 25%).

Status Report: Citibank processes bill payments for its own 300,000+ Direct Access base, plus its sole licensee BankBoston (formerly BayBanks) which has around
250,000 users, 80,000 of which use bill payment.

Bill Presentment Plans: Not disclosed. One is tempted to draw conclusions from Citibank’s recent investments in Integrion, MECA, and S1 (parent of SFNB), all of which are aligned with Checkfree; but we wouldn’t bet against Citi striking out on its own, leveraging the 300 million statements mailed to its 25 million MasterCard/Visa accounts.

 

 

 

 

 

Electronic Funds & Data

Gary G. Glanz, President

P.O. Box 2087

Bridgehampton, NY 11932

Phone: 516.537.6300

Fax: 516.537.2487

E-mail: gglanz@efd.com

Web: www.efd.com , www.billsite.com

Bill Payment Volume: 0

Status Report: EF&D appears to be the only vendor going after the small bank/small business portion of the market. See OBR 11/97, p. 15, for a report on their initial program with Suffolk County National Bank and the 326,000 accounts of Suffolk County Water Authority.

Bill Presentment Plans: Bill presentment is a core feature of everything the company is doing. But they also have assembled a virtual company which can handle any or all of a company’s billing needs, from reading the utility meter, collecting walk-in payments, to processing electronic payments. EF&D partners include: American Payment Systems, Online Resources & Communication Corp., Access Communication Systems, Lockheed Martin (back office data processing), BarkingFish Productions (Web development).

 

Integrion

William Fenimore, Managing Director

George Budd, Dir Admin & Operations

600 Peachtree St. NE, Suite 3700

Atlanta, GA 30308

Phone: 404.607.4000

Fax: 404.607.4200

Web: www.integrion.net

Bill Payment Volume: 0

Status Report: Integrion’s 18 bank owners, with relationships with 70 million North American households, are looking to Integrion to provide a full-service banking and payments platform. Electronic bill payment/presentment will be an integral part of that offering, apparently with Checkfree handling the bill pay transactions as part of their 10-year agreement (see Checkfree).

Bill Presentment Plans: Not disclosed, but expected to be closely aligned with Checkfree.

Integrion Ownership

ABN AMRO North America

Bank One

Bank of America

Barnett Bank

Citibank

Comerica

First Chicago NBD

First Union National Bank

Fleet Financial

IBM

KeyCorp

Mellon Bank

Michigan National Bank

NationsBank

Norwest

PNC Bank

Royal Bank of Canada

US Bancorp

Visa U.S.A

Washington Mutual, Inc.

 

International Billing Systems

Dawne Chandler, VP Elec. Services

Jorge Martin, Product Manager

5220 Robert J. Mathews Parkway

El Dorado Hills, CA 95762-5712

Phone: 916.939.5817

Fax: 916.939.4670

E-mail: jorge_martin@billing.com

Web: www.billing.com

Bill Payment Volume: 0 (currently, remittances are handled via paper)

Status Report: International Billing Services, owned by USCS International, is the largest billing outsourcer in the country handling 70 million paper statements each month including 58% of all cable TV subscribers, 39% of all cellular telephone subscribers, and 11% of all land-line telephone subscribers.

 

IBS’s statement volume is ten times Checkfree’s payment volume, so they have the potential to have a major impact in the market. Counting customer remittances, IBS accounts for 1.6% of the U.S. first-class mail volume.

Bill Presentment Plans: The company just announced its first foray into interactive billing and payments; a program with AirTouch Communications Inc.’s three million units in service. At this time, IBS is not playing favorites with the major electronic billing initiatives. The company plans to present its clients
e-bills at all the major sites: MSFDC, Checkfree, Intuit. and others. The company is also aligned with CyberCash to use its PayNow program for direct payment on the biller’s site.

 

Intuit

Eric Dunn, CTO

Nancy Tubbs, Product Manager

Mountain View, CA

Phone: 650.944.3037

Fax: 650.944.6977

Web: www.intuit.com

Bill Payment Volume: 0 (Checkfree, 19% owned by Intuit, handles bill payments requests originating from Quicken users.)

Status Report: Intuit continues to command a staggering share of market/share of mind in the personal finance market. It’s widely reported that its 10 million Quicken users account for an estimated 70% of 14 million total PFM users. Intuit’s QuickBooks also claims 75% of the small biz accounting software market.

Intuit’s share online is also impressive. The 1 million Quicken users paying bills through Checkfree account for 50% of Checkfree’s subscriber base, and about 33% of the entire PC-based bill payers in the country. Quicken. com, Intuit’s personal finance Web, boasts 2 million users and 1 million portfolios being tracked.

Bill Presentment Plans: The company has incorporated a bill presentment module in Quicken 98 with pilots scheduled to commence at the end of Dec. 97. We also expect to see Web-based presentment appearing on the Quicken.com site with 12 months.

 

MSFDC

Chuck White, CEO

6200 S. Quebec St.

Englewood, CO 80111

Phone: 303.488.8833

Web: www.msfdc.com

Bill Payment Volume:

Status Report: MSFDC is a joint venture between Microsoft and credit card processing giant, First Data Corp., both of which serve approximately 150 million end-users in their respective industries. At Retail Delivery the first week of December, MSFDC announced its initial pilot involving two bank hosts, Wells Fargo (no surprise) and Keycorp, one of the owners of Integrion (interesting defection from the Integrion/Checkfree camp), and 10 billers, five of which are financial services companies (see right).

MSFDC will offer both electronic bill presentment and pay-anyone bill payment. Payments can be made at either a bank-branded site or a standalone MSFDC site. In response to critics of the latter approach, MSFDC has stated that bank-branded delivery will be the default path. In other words, if a user registers at the MSFDC site for bill pay, and it is determined that the user’s bank is offering MSFDC bill pay, the user will automatically be bounced to the bank site for services.

Of course, it’s not doing this to be nice. With Microsoft and First Data driving their existing 150 million users to the MSFDC site, it will be hard for banks, especially the Integrion owners, to pass up this customer touchpoint.

Bill Presentment Plans: Bill presentment is the core activity that everything revolves around. It is anticipated that billers will pay for the service, with banks and end-users able to pay presented bills for no charge. Though not part of its original model, MSFDC now appears to be heading in the direction of paying financial institutions 2 or 3 cents per transaction to host MSFDC bills on their site. But banks/users will have to pay for non-presented pay-anyone bill payment.

Initial Pilot Participants

Bank Presentment/Payment Hosts

•  Keycorp
•  Wells Fargo

Billers

•  Advanta Corp.
•  Chase Credit Card
•  GE Capital
•  The Hartford
•  J.C. Penney
•  New Century Energies
•  Payment Systems for Credit Unions
•  PECO Energy Co.
•  Shell Oil Co.
•  Texas Utilities

 

Online Resources & Communications Corp.

Matt Lawlor, CEO

7927 Jones Branch Road

McLean, VA 22046

Phone: 703.442.4649

Fax: 703.442.4610

Web: www.orcc.com

Bill Payment Volume: Online Resources is processing 200,000 bill payment transactions per month. Expect that number to grow rapidly as new banks come online.

Status Report: Online Resources has 16 financial institutions live on the Web with account access and another 17 in pilot. The company has more than 100 additional clients in various phases of development. Online Resources is the only home banking vendor offering a choice of Web, direct-dial, screenphone, and telephone front-ends. And it processes bill payments to boot.

 

 

 

The company offers a unique bill payment process, authorizing and routing transactions through participating ATM switches. One advantage to this method is that “good funds” are guaranteed to the biller.

 

NPC

Karl Sammons, SVP

101 Bullitt Lane, Suite 450

Louisville, KY 40222

Phone: 502.326.7060

Fax: 502.326.7100

Web: www.npc.net www.virtualpay.com

Bill Payment Volume: minimal

Status Report: National City Processing Company (NPC), 88% owned by National City Corp. (Cleveland, OH; $53.4 billion), was an Internet bill pay pioneer, placing the first operational link on the Mobil Oil Web site in late 1996. The Mobil program is still in place, but NPC’s VirtualPay has been at a standstill the past 12 months. NPC has been busy shoring up its stock price after the much-publicized loss of Wal-Mart which accounted for 4% of its credit card processing business. The company’s stock price opened the year at 16 3/8, dipped to 6 3/4 in May, before rebounding to the current 9.5 to 10 range.

NPC’s VirtualPay Web lists the following participating firms. But other than Mobil, none appear to have progressed beyond the “proof of concept” stage:

•  Calistoga
•  First USA
•  Mobil
•  Sunoco
•  Telegroup
•  Unocal

 

Princeton TeleCom

Donald Licciardello, President

165 Wall St.

Princeton, NJ 08540

Phone: 609.924.1244

Fax: 609.924.1096

E-mail: don@princetontele.com

Web: www.princetontele.com

Bill Payment Volume: The company is processing 500,000 payments per month across 550,000 registered users. Most are single payment, telephone-authorized utility payments.

Status Report: Privately held Princeton TeleCom has been in business for 14 years and provides numerous telephone and electronic lockbox payment services to more than 600 billers. The company has more than 60 million account receivable records on its database, though only a fraction are paid electronically.

Bill Presentment Plans: The company is now marketing an Internet bill presentment server. One of the first users is Union Electric Company, a St. Louis utility with 1.3 million customers.

 

Travelers Express

David Roy, VP Electronic Bill Pay

1550 Utica Ave. S.

Minneapolis, MN 55416

Phone: 612.591.3807

Fax: 612.591.3860

Web: www.travelersexpress.com

Bill Payment Volume: Travelers processed 38 million bill payments in 1997 for an average of 3.2 million per month. Payments were drawn on 525 financial institutions and sent to 60,000 payees. This volume includes telephone, direct-dial PC, Web and walk-in utility payments. The company does not provide a break-out by device type.

Status Report: Travelers, a division of Viad Corp., is the second largest processor of bill payments. Travelers purchased PayMate in Oct.’95 to add PC and telephone-initiated bill payments to its existing payment product lines which includes money orders, official checks, and walk-in utility payments (BuyPay).

In January, Travelers will complete a massive overhaul of its MoneyLine Express bill payment engine resulting in a system that does a better job of reporting payment status to end-users and financial institution partners performing bill pay customer service.

Travelers distributes its payment products through a network of:

•  4,500 financial institutions using its official checks and share drafts
•  16,000 agents that receive in-person utility and other bill payments
•  45,000 retail outlets and convenience stores that sell money orders
•  16 PC banking solution providers (table below)\

Bill Presentment Plans: Not disclosed, though the company does have a bare-bones bill presentment section on its Web.

 

 

Switches

Deliver payments, statements, & authorizations between financial institutions.

 

 

 

 

MasterCard RPS

Michael Tempora, SVP

Paul Mila, VP Remote Banking

2000 Purchase St.

Purchase, NY 10577

Phone: 914.249.4029

Web: www.mastercard.com

Bill Payment Volume: 2.5 million transactions per month originated at front-end providers (Checkfree, Travelers, et al).

Status Report: MasterCard’s RPS system is the leading consolidator of electronic payments. The association pulled the plug on its MasterBanking home banking initiative a year ago.

Bill Presentment Plans: Not disclosed.

 

VISA ePay

Joseph Vause, VP Electronic Banking

Foster City, CA

Phone: 415.432.3366

Fax: 415.432.5723

Web: www.visa.com

Bill Payment Volume: Visa Interactive payment processing has been transferred to Integrion/Checkfree.

Status Report: Visa has exited the home banking/bill payment market by transferring operations to Integrion in a complicated transaction that left Visa a reported $25 million poorer, but with an equity stake in Integrion, and no more bill payment headaches.

Bill Presentment Plans: Visa’s ePay electronic bill presentment program continues, with pilots scheduled for 1998. More than 300 merchants are set up on ePay now.

 

 

Internet Billing Software

Enables interactive billing and payments.

 

 

 

 

BlueGill Technologies

Hal Davis, President

1756 Plymouth Road, Suite 299

Ann Arbor, MI 48105

Phone: 313.426.5894

Fax: 313.426.5044

Web: www.bluegill.com

Status Report: Provides software to allow billers and banks to put statements on the Internet. Targets three vertical markets: financial services, telecom, and utilities. M&I Data Services will be incorporating BlueGill’s billing technology in an upcoming release. Aligned with CyberCash for secure payment transmission.

 

CyberCash

Richard Crone, VP & GM PayNow

2100 Reston Parkway

Reston, VA 22091

Phone: 650.413.0165

E-mail: rcrone@cybercash.com

Web: www.cybercash.com

Status Report: CyberCash has entered three Web-based processing businesses: credit cards, micropayments, and electronic checks/Internet billing. Cybercash targets large credit card merchant services firms, commercial bank lockbox operations, and solution providers to get them to incorporate Cybercash processing methods in their products and services.

Bill Presentment Plans: Cybercash has become the leading advocate of bill presentment directly at the biller’s site, for Richard Crone’s discourse on the advantages of the direct-to-biller model.

 

Edocs

Kevin Laracey, CEO

Westlake Village, CA

Phone: 818.707.0330

Fax: 818.707.7891

E-mail: info@edocs.com

Web: www.edocs.com

Status Report: Specializing in turning legacy system print streams into Web-accessible statements. Aligned with CyberCash for secure payment transmission.

 

 

 

 

 

 

Just In Time Solutions

Mike Lanza, President and CEO

444 De Haro Street, Suite 100

San Francisco, California 94107

Phone: 415.553.6400

Fax: 415.553.6499

Email: info@justintime.com

Web: www.justintime.com

Status Report: Just in Time Solutions (JITS) helped Intuit develop the bill presentment module in Quicken 98. The company has also aligned itself with Checkfree and International Billing Systems. The company has also built Web solutions for Levi Strauss, LSI Logic, Oracle, and Robert Half International.

Bill Presentment Plans: JITS offers complete Internet billing services for billers and service bureaus including:

•  Internet billing servers for presenting bills and facilitating payments directly on the Web, as well as all OFX consolidators
•  Internet billing systems integration
•  Internet billing Web site development