Metavante Corp. plans to offer a service to process last-minute bill payments, which would enable its customers to charge users a fee.
This is the third time in two months a banking vendor has announced technology that would allow companies to tack on for-fee services to online bill payments.
Metavante, a subsidiary of the Milwaukee banking company Marshall & Ilsley Corp., said Just Pay It Convenience would let people initiate one-time or recurring payments to billers through the Internet, interactive voice response systems, or call centers. People would be able to charge payments to credit or debit cards, or initiate automated clearing house debits to their bank accounts.
Metavante, which announced the service Monday, already offers standard online bill-payment and -presentment services under the Just Pay It brand. Dave Fortney, a senior vice president in Metavante's electronic presentment and payment unit, said the first billers are expected to go live by the end of the quarter.
Though the new service targets billers - such as utilities, insurers, telecommunication companies, colleges, and banks in their roles as credit card issuers or mortgage servicers - Mr. Fortney said Metavante plans to develop other Just Pay It services that banks could use to generate fees for themselves while routing last-minute payments to other companies.
Online bill payment was once a lucrative niche for banks that charged fees for the service, but it has become an expense. Many of Bank of America Corp.'s rivals copied B of A after it eliminated its fee for electronic bill payment in 2002, and most banks now say that offering the free service helps retain customers and can boost cross-selling efforts.
In the past month, however, two providers have introduced payment services for which banks and billers can levy fees. Yodlee Inc. of Redwood City, Calif., said in June that it would offer a payment service that would be built around its account aggregation software and that would let banks charge bill payments to debit cards and generate interchange revenue. Most online bill-payment systems send funds through the ACH network.
CheckFree Corp. of Atlanta, the leading provider of electronic bill-payment and bill-presentment services, said this month that it plans to unveil a last-minute-payment service for banks next year.
James Van Dyke, the principal and founder of Javelin Strategy and Research in Pleasanton, Calif., said last-minute payments will probably become a good opportunity for banks and billers to generate fees.
"Consumers are willing to pay for this, and this is a smart move on Metavante's part," Mr. Van Dyke said in an e-mail message.
Mr. Fortney said the timing of Metavante's announcement was not a response to its rivals. "We've been selling it for a while now," he said.
Instead, he said, the company wanted to publicize its work in adapting technology that it obtained when it acquired the government payment processor Link2Gov Corp. of Nashville last November. That technology enables same-day and real-time payment receivables integration, which Mr. Fortney said Metavante has been marketing to other billers.
"We think there's a big market out there," he said. "Most of these utilities today do not have a Web product" for last-minute payments.
The challenge is to integrate Metavante's payment systems with the biller's receivables system to provide the real-time or same-day reporting, Mr. Fortney said. "That piece is the one you can't standardize," he said. "Billers have all kinds of systems out there."
He would not say how much fee income he expected the last-minute-payment service to generate.
"The fee may vary biller to biller, depending on the size of the transaction or the mix of transactions," Mr. Fortney said.
Metavante, he said, has signed up "several dozen billers" for Just Pay It services.
In contrast, CheckFree says it offers online presentment for 368 billers, and offers last-minute payments now through some billers' Web sites.
Metavante's payments services have grown significantly since it acquired the debit network operator NYCE Corp. of Montvale, N.J., in July 2004 from its former majority owner, First Data Corp., and the four large banking companies that held a minority stake, Citigroup Inc., JPMorgan Chase & Co., FleetBoston Financial Corp., and HSBC USA Inc.
Metavante also set up a unit in February to process health-care payments, and this month it started a corporate cash management division.
