Visa International has announced a roster of more than 30 banks that will take part in its home banking services using Microsoft Corp.'s Money software.
The news comes a little more than a month after Microsoft and Visa announced an agreement to provide a processing option for home banking through upcoming versions of Microsoft Money. Microsoft followed by publishing specifications to enable any banking processor or service provider to offer products and services through Money.
Previously, the only processor for home banking was Intuit Services Corp., a unit of Intuit Inc., the software company that makes Quicken, Microsoft Money's biggest home banking competitor. Intuit Services handles banking transactions through both Quicken and Money.
Phoebe Simpson, an analyst with Jupiter Communications Co. in New York, said Visa could prove to be a serious threat to Intuit because it can bundle home banking with its other card-based services. What's more, it has close ties to thousands of member institutions.
"Visa, hands down, has got more resources," she said.
The financial institutions that have committed to the Microsoft-Visa alliance include participants in the Visa Interactive home banking program, such as units of Star Banc Corp. of Cincinnati, Zions Bancorp. of Salt Lake City, and Deposit Guaranty Corp. of Jackson, Miss.
Joining the group are Barnett Banks Inc. of Jacksonville, Fla., Old Kent Financial Corp. of Grand Rapids, Mich., Regions Financial Corp. of Birmingham, Ala., Sumitomo Bank of San Francisco, and Providian Bancorp, the San Francisco-based credit card unit of the insurance holding company Providian Corp.
The group also includes Compass Bank of Birmingham, Ala., which had previously signed on with Intuit Services. Sources said at least one other Intuit partner is in the Visa-Microsoft group but its name has not been announced.
Compass Bank's home banking executive was not available to comment on the strategic significance of the decision. Outside observers said this indicated that Microsoft is giving Intuit Services a run for its money.
"There was no doubt when Microsoft made its announcement that it was going to put pressure on Intuit," said David Weisman, an analyst with Forrester Research of Cambridge, Mass.
"We all like Quicken," said one executive from an Intuit partner bank. "But we don't all like ISC. Intuit has come across as inflexible."
Sheryl Ross, a spokeswoman for Intuit in Menlo Park, Calif., said Microsoft's expanded options were "not undercutting Intuit Services." It is contributing to the "healthy competition of the market."
While Mr. Weisman conceded that no "mass exodus" from Intuit Services is in the offing, Microsoft's gambit gives banks leverage to negotiate lower pricing, provide customer service guarantees, and perhaps even enhance their own processing choices.
"The banks have been awed by all the statistics about the Internet and all the hype about PC banking," said Seamus McMahon, a consultant at First Manhattan Consulting Group. "They haven't negotiated as hard as they will."
"We're going to look at all our alternatives and do what's best for our customers," said Richard Comandich, senior vice president at Portland-based U.S. National Bank of Oregon, an Intuit Services partner for both Quicken and Money.
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Three more bank service providers have pledged support for Microsoft Corp.'s new specifications for home banking transaction processing.
Online Resources and Communications Corp., a McLean, Va. home banking servicer; Edify Corp., a Santa Clara, Calif., software company; and Ultradata Corp., a Pleasanton, Calif., bank service provider separately said last week they would adopt the so-called "open financial connectivity" specifications.
The specifications are part of Microsoft's effort to make it easier for financial institutions to deliver home banking services through its Money finance software.
The three new companies deal mainly with community banks and credit unions.
Last month, Checkfree Corp., a Columbus, Ohio payment processor, and CFI Proservices Inc., a Portland, Ore.-based software and service company, said they also plan to use the specifications.
