NEW ORLEANS -- Microsoft Corp. said it is working with three major banking companies to introduce an electronic bill payment and finance system for people with personal computers.

Two of the banks -- First Chicago Corp. and U.S. Bancorp of Portland, Ore. -- announced their Microsoft-based home banking plans Thursday in their local markets, saying the service will be available early next year in conjunction with Microsoft's Money financial management software.

The third provider, Michigan National Corp., plans an official introduction at a later date.

Executives from each organization joined Microsoft in announcing their "development partnership" during the Bank Administration Institute's retail delivery systems conference here.

Microsoft had previously given only sketchy details of its banking package, and First Chicago was the only bank to be publicly associated with it. Because of Microsoft's dominance in personal computer software, its involvement has been widely anticipated.

Some bankers -- particularly those who have been in the development stages with Microsoft for the past year -- view the Redmond, Wash., company as a crucial catalyst for bringing computerized home banking to a broader consumer market.

'Mercenary Motives'

"I am absolutely convinced this will succeed," said Alan Ostroff, senior vice president at Michigan National Bank in Lansing. "We do have mercenary motives, and we believe we can share in significant [profit] results right away."

"We are expecting over 2,000 users within a year, which is 1% of the potential market, and we think that's conservative," said James Grant, senior vice president of marketing at First Chicago.

With its "Bank Online" and "Pay Online" components, the software will give users the ability to pay bills electronically, as well as review cleared transactions and reconcile accounts with data supplied by the banks over telephone lines to modem-equipped PCs.

"We want to combine the power of the PC with the power of the ATM," said Richard Bray, Microsoft Money's product manager.

The announcement was the latest of a string of home banking projects launched by banks, often with computer and telecommunications companies.

Mr. Bray said there are currently "a few hundred" bank customers testing the software. Remittances from the bill payment feature will be handled by National Payment Clearing House, a Schaumburg, Ill.-based processor of bill payments.

Michican National's Mr. Ostroff said his bank will charge customers $14.95 a month for Bank Online and Pay Online. First Chicago and U.S. Bancorp officials said they have yet to set pricing for the service.

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