Diagram of the QSpace online credit report system.
Financial institutions can offer the service on a private or co-branded basis.

QSpace has been delivering credit reports online since July 1997, for $5-8 each. The company continues to maintain its unique position as the only place on the Net where you can order and view your report online (data is from Experian). Originally, a VeriSign digital certificate was required to access your report, but the company has since dropped that requirement, though you still can save $3 off the $8 price if you have a VeriSign Class 2 certificate <www.verisign.com>.

We recently tested the QSpace system and found the procedure relatively simple and straightforward. The report was easy to read online and printed out nicely. And at a cost of $5 ($8 without a VeriSign certificate) the report is a good value. It took about five minutes to enter all the necessary data and receive the report. It would take a bit longer to answer a few additional questions if you don’t have a VeriSign certificate.

We were surprised to hear from QSpace President, Ike Eze, that he hasn’t had much interest from banks wanting to distribute QSpace/Experian credit reports online. Though we haven’t done due diligence on QSpace’s security procedures and service quality, Experian seems satisfied with the company’s user authentication and delivery methods. The first financial institution that offers credit reports online will create quite a buzz in the marketplace.

QSpace will share revenues with financial institution partners. The service could be offered co-branded or completely private branded. The company is especially interested in strategic partners that could help build the QSpace brand and/or deliver significant volume. This could be a good time to cut a favorable deal.

The current $5/$8 price may not generate an abundance of fees to share. But the company has a subscription product in development that is expected to be priced in the $50 range, competitive with Cendent’s PrivacyGuard (see table on p. 10), marketed at $59.99 per year after the three-month $1-trial period.

A hypothetical bank/CU with 50,000 unique Web visitors might bag 2,000 subscribers over a 12-month period. Assuming 20% revenue sharing from QSpace and a $50 annual subscription price, that amounts to only $20,000 in the first year. But subscription-based businesses are all about building a base over time. Assuming a 75% renewal rate and continued growth of 2,000 new subscribers each year, by the end of year five the service would be generating $60,000 in annual profits. Plus it will help drive new business to your Web (at least while it is a novelty), increase customer retention and boost loan cross sales.