Checkfree Holdings Corp. has changed the way it charges its biggest customers for electronic bill presentment and payment services.

Pricing no longer revolves around monthly fees paid by financial institutions for individual customers. These fees, which average $4 per customer, had been imposed regardless of whether an enrolled customer actually used Checkfree's services.

The new mix of fees -- which includes a fixed monthly charge, a fee for each electronic payment, and a "small" monthly subscriber fee -- should add up to less than $4, Checkfree officials said, though they declined to be more specific. Checkfree negotiated the fees individually for each large institution.

The shift "should help our (bank) partners justify promoting this service more aggressively," said Peter F. Sinisgalli, president and chief operating officer of Checkfree. The new structure could inspire financial institutions to offer free trials of the electronic payment service, he added.

The Norcross, Ga., transaction processing company would generate the same revenue that it already is receiving from each institution, a spokeswoman said. But for banks, she said, the incremental cost of adding subscribers would come down.

The spokeswoman would not name the Checkfree customers using the optional pricing structure but said, "Think of it as our top 10."

Darren Montgomery, an associate at Mitchell Madison Consulting Group in San Francisco, said Checkfree's move is "not surprising. I think the whole market is moving toward per-transaction fees, as the banks won't be able to continue charging the consumers for that service."

The announcement met with praise from at least one major customer.

"We've been pushing Checkfree for a long time to go to that mode," said Lou Anne Alexander, vice president and bill payment manager at First Union Corp. in Charlotte, N.C.

She said some people who sign up for electronic bill payment do not become active users. Banks must either continue to charge them a significant monthly fee or cover it themselves to keep them enrolled.

Checkfree's announcement comes as competitor Princeton eCom Corp. has been aggressively promoting an electronic bill payment service with no initial charge or monthly subscriber fee.

The Princeton, N.J., company charges banks only per-transaction fees.

"The more Checkfree can do to increase adoption rates at banks by allowing all the banks' customers to see the benefits of home banking, the better it is for the industry," said Steven Greenwood, senior vice president of marketing and strategic alliances at Princeton eCom. "We still believe the best way to help a bank to increase adoption is to charge strictly on a per-transaction basis."

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