To the Editor:

"Checkfree Offers Bill Payment Processing to All Comers" (May 31, page 16) correctly positioned Checkfree Corp. as the leader in electronic bill payment processing, but it included several factual errors.

First, it is necessary to clarify the nature of Checkfree's relationship with MasterCard. Through its alliance with MasterCard, Checkfree continues to pursue an aggressive, bank-targeted strategy. The MasterBanking program has, among other things, provided Checkfree with the opportunity to strengthen its vision of providing a comprehensive electronic payment solution for banks. Checkfree intends to support its partnership with MasterCard 100%.

While MasterCard allows Checkfree to service a number of financial institutions, there were many that fell outside the intended scope of the original agreement. Given this, Checkfree, with the full support and cooperation of MasterCard, modified the agreement, thus enabling Checkfree to serve a broader segment of the industry.

Your article quoted Hugh Fraser of Checkfree as saying that working with MasterCard was "more limiting than anticipated." This was taken out of context and does not represent the true state of the partnership. Despite Checkfree's pursuit of additional financial institutions, Checkfree is fully committed to the MasterBanking program. (It should be noted that the Checkfree-MasterCard relationship was correctly depicted in an article on June 8, "AT&T Signs with Checkfree, CFI in Home Banking Push," page 13).

Also according to the May 31 article, Mr. Fraser said Checkfree was about to "flex its remittance processing muscle" against MasterCard's Remittance Processing System, when in fact Checkfree is the largest RPS originator and the modified agreement will increase MasterCard's RPS volume.

The article mischaracterized Checkfree's processing agreement with Society National Bank of Cleveland. The agreement involved Society's providing credit card processing for Checkfree, not Checkfree providing bill payment services for Society via screen phones. And contrary to the report, the Checkfree-Intuit lawsuit has not been settled.

The final portion of the article implied that Checkfree's relationship with MasterCard as well as Checkfree's strategy to offer its services to a broadened bank base is somehow related to Checkfree's relationship with Intuit. The two items are not related in any way. Michael Sapienza Vice president, marketing Checkfree Corp. Columbus, Ohio

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