As it nears its two-year anniversary in September, Integrion Financial Network has yet to fulfill its original vision of becoming a one-stop wholesaler of on-line banking systems.
The creation last year of MSFDC, a joint venture of Microsoft Corp. and First Data Corp., has only served to confuse matters.
MSFDC's aggressive promotion of a bill presentment and payment system, including the wooing of Integrion's member banks, has helped cast Integrion in the light of an on-line alternative rather than the banks' main systems provider.
In the latest indicator of the Integrion consortium's vulnerability, one of its 17 owner banks, Mellon Bank Corp., said last week that it would become an MSFDC pilot bank.
Mellon officials said the Denver-based joint venture offered a quicker entry into bill presentment. It is planning to start a test with employees this summer.
"The MSFDC platform seems more mature and it offered us the easiest way to get involved in bill presentment in the short term," said Dave Spier, manager of Internet and PC banking at Mellon Bank.
Mellon has no plans to use Checkfree Corp.'s bill presentment service, which is being promoted by Integrion, Mr. Spier said. But it said it would soon test Integrion for home banking transactions.
Mellon joins other Integrion owners Norwest Corp. and KeyCorp as MSFDC testers. Another Integrion owner, Banc One, has announced it will use the bill presentment systems of both Checkfree and Integrion.
Besides pilot participants KeyCorp, Banc One, and Norwest, other Integrion owners BankAmerica Corp. and Citicorp participate on MSFDC's advisory board.
Working with MSFDC exclusively are Wells Fargo & Co. and Merrill Lynch & Co. Last week Wells became the first to present bills on its Web site using the MSFDC system in a test with employees of the bank.
Merrill Lynch also participates indirectly with Integrion through its membership in Visa Interactive, which Integrion purchased last summer.
Integrion chief executive officer William M. Fenimore said, "We haven't done a good job in terms of telling Mellon Bank what we have to offer."
He said Banc One's expected rollout of Checkfree's bill presentment system "goes far beyond a pilot of employees."
Mr. Fenimore acknowledged that the nature of electronic banking and payments has forced Integrion to temper its "original premise, (which) was to avoid infrastructure investment in middleware platforms and provide low- cost services through scale operations.
"I would add that we are also becoming an aggressive integrator of application providers such as Checkfree," Mr. Fenimore said.
Though Integrion would like to be serving more banks and customers, almost every home banking provider is facing the predicament of "numbers that fall far short" of expected customer adoption, he said.
"Integrion started out with the idea of providing a full suite of services," said Gary Craft, an analyst with BancAmerica Robertson Stephens in San Francisco. "Now they are more like a think tank than an executor of change in the banking industry."
Merely by existing, Integrion promotes change, Mr. Craft suggested. "The competition between MSFDC and Checkfree is very good for banks, because these two 800-pound gorillas are driving change," he said.
"Integrion's mission has evolved over time, and I don't think it is set in stone yet," said Bill Burnham, senior research analyst at Credit Suisse First Boston in San Francisco.
"I wouldn't be surprised to see it move to the payment and switching model," Mr. Burnham said. "They would be a giant document-switching network."
Even as its mission evolves, Integrion retains many of its original loyalists. PNC Bank Corp.-Mellon's Pittsburgh rival-last month joined NationsBank Corp. and Banc One in offering Web-based banking and bill payment via the Integrion network.
Other Integrion owners in pilot programs or expected to begin them soon include Michigan National Corp., First Chicago NBD Corp., Washington Mutual Inc., and ABN Amro.
"Right now we very much prefer to have Integrion provide the backend," said Martin Evancoe, vice president of on-line banking at PNC Bank. "We have not given up on Integrion being the integrator."
Mr. Evancoe said Mellon Bank's use of MSFDC's bill presentment system "is going to put a little pressure on Integrion" to develop a system that will allow bills presented through one service to be paid through another.
"We need someone like Integrion to work with Checkfree, MSFDC, and Princeton Telecom Corp.," he said, referring to three high-profile bill presentment providers. "It can't be a Checkfree-only business."
Others working with both Integrion and MSFDC see no conflict in their dual alliances.
Billing services are just one element of what Integrion offers, said C. Webb Edwards, chief technology officer of Norwest Corp. Whether Integrion or another provider supplies Norwest's bill payment and presentment, it "won't impact our relationship with Integrion," Mr. Edwards said.
Integrion recently beefed up its management, hiring George E. Palmer as chief technology officer and J. Prescott "Scott" Wallace as chief marketing officer.
Mr. Palmer, 53, managed data center operations for two large companies. Before that he spent 25 years at International Business Machines Corp.
Mr. Wallace, 45, came to the consortium from PNC Bank Corp.'s consumer marketing division. He worked for 17 years as a consumer products executive at various companies including Keebler Co., Kraft Foods, and Pepsico's Frito-Lay division.