Checkfree/Yahoo

bills.secure.yahoo.com

Yahoo! launched its much anticipated bill pay center, a co-branded effort with the preeminent bill pay provider, Checkfree. Banks can breathe a sigh of relief. It’s a good, solid service that will appeal to hardcore Yahoo! users (if they can find it), but it’s no market share grabber, as it might have been. It seems Yahoo!/ Checkfree are looking at the business as a fee-based profit center rather than a traffic-building loss leader.

Checkfree’s new “icon” and transaction guarantee.

Say What?

The screenshot above clearly demonstrates that Yahoo! operates in a different legal and regulatory environment than a bank. Can you imagine what
your compliance officer would say if you proposed running this copy? “Try (yourbank) Bill Pay as low as $2 per month,” given that the only way to pay $2 is to sign up for the service and then not use it! A typical customer, paying five to 10 bills per month, will pay $4 to $6 per month.

Weak Features:

•  Most significantly, the service is premium priced, $7 per month for 25 payments, then $0.40 each; or $2 per month plus $0.40 for every payment.

•  The product is plain vanilla Web-based bill payment, with none of the value adds one might have expected at Yahoo! such as, email alerts, bill presentment, linkages to online banks, and so on.

•  The user interface is surprisingly uninspired. We understand Yahoo! has built a $45 billion business on based on a straightforward and relatively boring interface. But Yahoo! Bill Pay is worse than boring, it’s so sparse that it’s hard to use. We don’t understand why it wasn’t modeled on the excellent interface at Checkfree’s MyBills.com site (see screenshot).

•  So far, the product is difficult to find on Yahoo! It’s not listed in either the Banking or Finance centers. Even searching on “bill payment” doesn’t lead you directly to the service. EDocs had an exclusive on the banner space when we tested (9/16/99). You have to scroll through to the fifth page of search results to find the link to Yahoo! Bill Pay. However, searching on “pay bills” or simply “bills,” does return Yahoo! Bill Pay as the first link.

Boring. The Yahoo! Bill Pay user interface leaves a lot to be desired. Here the first screen that greets a new user upon successful login.

•  In both of our test emails, the company responded the same day. However, because the responses are not sent to an Internet email address, but instead are posted to the users Yahoo! Bill Pay account, they lose much of their effectiveness. There isn’t even a message at login notifying users they have mail.

Mediocre Features:

•  The eight-screen demo is slow and uninspired.

•  No third-party guarantees (e.g., Travelers SafeWeb) or security reassurances (e.g., Verisign).

•  The sign-up process is easy enough, although Yahoo! users have to go through a separate sign up for a Security Key if they don’t already have one. Input is completely electronic but users are told they must wait up to 10 days for a snail mailed Payment Activation Code. (It only took three days in our test.) There are valid security reasons for using snail mail, but the company could have used credit bureau info to verify our application and authorize an initial dollar amount of payments immediately.

•  Although, the payee list contains only 200 names (as of 9/9/99), that doesn’t include the thousands of credit card issuers that are pre-programmed into the system. Users simply select Visa or MasterCard as payee, enter account number twice , and Checkfree’s system automatically recognizes the correct issuer. Users can easily set up their own payees using

Excellent: In comparison, Checkfree’s own WebBillPay features an excellent user interface www.mybills.com

a Web-based form. New payees can be paid immediately, there is no waiting for merchants to be approved or set up offline.

Good Features:

•  Checkfree’s revised payment guarantee is a winner, although it stops short of being the clear-cut promise needed to instill broad consumer confidence in the service. Any financial institution using Checkfree can post the company’s icon, although we’re not sure it adds much to an existing bank’s credibility. In fact, it might be a slight negative, since users probably don’t know (or care) that Checkfree is processing their payments, not the bank.

•  New account setup and customer service were flawless. In our test, the initial Payment Activation Code was mailed promptly the next day (a Saturday) despite the fact that we submitted our application at 4:30 p.m. Pacific Time on Friday afternoon. In addition, two emails sent to customer services were answered accurately the same day.

•  A generous three-month free trial is included.

•  FAQs were concise and included an imbedded inquiry form to ask additional questions (see screenshot on next page).

Contact: At Checkfree, Matt Lewis is EVP Product Management and Marketing, (770) 441-3387. At Yahoo!, Tim Brady is VP Production and Executive Producer, (408) 731-3300.

Checkfree uses an old data entry trick, requiring customers to type their account numbers twice
(on different screens) to catch typos.

Yahoo! Bill Pay FAQs include an imbedded email query form after each answer.