Electronic bill presentment and payment could generate $500 million for businesses that help billers get on-line over the next couple of years, according to a Goldman, Sachs & Co. analyst.

The estimate assumed that 20% of households will be banking on-line, up from about 5% today, and that most of these also will pay bills on-line, said Lori B. Appelbaum, Goldman's regional bank analyst, in a recent report.

For facilitators to generate those revenues, billers would have to be charged 30 to 35 cents per bill presented electronically, Ms. Appelbaum said.

Banks taking the initiative in offering bill presentment services themselves, rather than going through an intermediary, stand to gain the most, she added.

The three banking companies behind the recently announced Exchange electronic billing network-Chase Manhattan Corp., First Union Corp., and Wells Fargo & Co.-could be big winners, according to Ms. Appelbaum. She estimated revenues of about $50 million a year for each, if Exchange were to garner 30% of the market.

"We view the banks' interest in developing their own bill presentment offering as a means to maintaining their dominance within the electronic side of the payment system, akin to the control held within the physical or check payment side," Ms. Appelbaum wrote.

Otherwise, she said, banks could find themselves preempted by software providers like Microsoft Corp. and First Data Corp. - owners with Citigroup of the Transpoint bill processing venture-or by brokerage firms and Internet portals.

Charles Schwab & Co. and Morgan Stanley Dean Witter & Co. offer electronic bill presentment at their on-line brokerage sites, both relying on Checkfree Holdings Corp. of Norcross, Ga., which is widely recognized as the leader in electronic bill presentment.

Yahoo Inc. is known to have been in discussions with Checkfree on a bill presentment offering, though neither company has formally announced a partnership.

The trio behind the Exchange present a formidable front, Ms. Appelbaum said, because of the large numbers of consumers and billers they can bring into the system they plan to launch this year.

Exchange's banks serve 60 million consumers, including depositors, mortgage borrowers, and credit card holders. The three institutions also are expected to double their number of on-line banking customers-currently between two million and three million-in the next year.

Other analysts said it is too soon to assess just how much revenue the members of Exchange will be able to gather. Brook Newcomb, a senior analyst at Forrester Research in Cambridge, Mass., said the lack of detail about how payments would be executed on Exchange is a concern.

"I think there's a lot more to be said on that," he said.

Exchange members also face skepticism because bank consortiums have often not been agile in deploying new technologies, Ms. Appelbaum pointed out.

"We believe, however, that the incentives are significantly high enough (in terms of these banks' commitment to the Internet and on-line banking, and the customer-retention and revenue-potential issues) that the Exchange has a fair likelihood of succeeding," her report said.

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