Electronic Data Systems Corp. and Checkfree Corp. have announced a joint marketing agreement for on-line banking services.

EDS will tie its remote banking platform into Checkfree's payment processing system, and the pair then can market a single end-to-end service encompassing banking and electronic payments.

Checkfree, which is based in Columbus, Ohio, is hoping to solidify its position as a home banking service provider to small and midsize banks.

For EDS, the alliance may help clarify its strategy in electronic banking services. Both independently and through Interactive Transaction Partners, its joint venture with US West and France Telecom, EDS has been making a play in home banking for more than two years.

But critics say the Plano, Tex., company has not yet been able to transfer its overall computer services prowess into the remote banking market.

Mark Johnson, executive vice president of Checkfree, conceded that EDS "hasn't been that successful (and) has had some challenges" in home banking. Nonetheless, given its record in bank servicing, he said EDS is sure to be one of the three or four major players left standing when the home banking business shakes out.

Thus, Checkfree has been eager to hitch its fate to companies like EDS and Fiserv Inc., another bank service company with which the processor forged a similar agreement last fall.

Currently, Checkfree processes payments for 40 banks, most in the $500 million-asset range, Mr. Johnson said.

Ted Shaw, vice president and manager of banking services at EDS, said the Checkfree arrangement will help the company respond better to the recent "sizable demand to provide home banking."

Even with its vaunted experience in data processing, Mr. Shaw said that until now EDS "didn't have the back end for home banking."

So far, ITP has signed on about 30 financial institutions, said Craig Dees, a company spokesman.

Seeking to woo banks into its interactive fold, EDS recently offered to build a basic Internet site for free for the first 3,000 banks and credit unions that apply. So far, 70 financial institutions have taken the company up on its offer.

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