A consumer software subsidiary of H&R Block has become the latest to enter into a home-banking alliance with Visa International. Block Financial Corp., best known as the provider of the "Managing Your Money" software product, has signed a letter of intent to contribute a PC-based finance package to Visa's r, emote banking program.
The Block software should be available in the first half of 1995, said Visa Interactive, the card association's home services unit. The announcement marked the first major expansion of Visa Interactive's service menu. It came less than two months after Visa took over the home-banking and bill payment business of Herndon, Va.-based U.S. Order. Those operations became the foundation of Visa Interactive. U.S. Order's transaction processing approach, built around a telephone with a computerized screen called PhonePlus, is expected to be Visa members' principal means of entry into home banking.
But Visa, like MasterCard International and other home-banking service providers, has made a commitment to accommodate a range of consumer-connection options, including personal computers.
The Block product now under development, which will be modeled after "Managing Your Money," would help Visa banks reach the PC market with an alternative to Microsoft Money and similar offerings.
Both Visa and its partner emphasize that their money management service will carry the brand names of participating financial institutions, rather than a powerful nonbank name like Microsoft or, for that matter, Block.
Visa also appears to be tilting away from an arrangement with Intuit Inc., maker of the popular Quicken personal finance software, which was the card association's first home-banking ally when it began to put the strategy together last year.
But in the interest of fostering choices, and in deference to Quicken's success, Visa would not close off that option if a bank wanted it.
Some home-banking promoters have warned that nationally recognized nonbank brands like Microsoft, Quicken, and Checkfree, which is a bill-payment partner of MasterCard, could dilute the bank-customer relationship as home-based services take hold.
"Block Financial is a perfect partner because it has recognized the concerns our member banks have with the potential disintermediation of their customers," said Fraser Bullock, the former U.S. Order executive who is president of Visa Interactive.
The Block unit's strategy "keeps a strong bank-to-customer relationship and provides them with a powerful distribution channel - the strength of Visa members worldwide and the VisaNet [telecommunications] systems - for their software," Mr. Bullock said.
The alliance gives Block Financial a big lift in its attempt to penetrate the banking market through the "private label" approach, said Paul D. Harrison, president of the company's "Managing Your Money" venture.
This software unit, formerly known as Micro Education Corp. of America, or Meca, is testing a private-brand financial product with Citicorp in three states and is working with at least three other banks, Mr. Harrison said in an interview.
"The Visa arrangement is a real marketing opportunity for us, giving us significant access to many individual banks, large and small, in an organized way," he added.
"We strongly believe banks need to own the relationship with their customers, as a private brand, regardless of the access device used," Mr. Harrison said. Some institutions "will want to take a relatively standard Visa package, others will want to add more of their own personality."
Mr. Harrison said that even without a major marketing push, his organization is receiving at least one call a day from financial service organizations inquiring about the PC software. He sees that as a measure of the growing seriousness of interest in home banking and of the concern about "national software products as a potential threat to banks' control.
"Some percentage of customers will be interested [in the big-name software] ,"
Mr. Harrison said. "But there is more loyalty to a bank than to a piece of software, and the bank should take advantage of that."
Visa said it envisions having consumers sign up for the "bankbranded, user-friendly" homebanking package at their financial institution.
The institution's services could include bill payment, balance inquiry, fund transfers, statement information, and electronic mail.
