Confirming weeks of rumors that his company has aligned with one of the Internet portals for bill payment and presentment, Checkfree Corp. chairman and chief executive officer Peter J. Kight said the deal should be of no concern to "progressive" banks.
In a conference call Wednesday about Checkfree's earnings statement, Mr. Kight, said he was not at liberty to identify the portal or the terms of the agreement.
Speculation centers on Yahoo Inc. Checkfree would work with the Internet gateway to let consumers receive and pay bills on-line. Checkfree did not disclose exactly what role banks would play in such a portal-based program.
"We remain absolutely convinced that consumers value electronic billing and payment under their bank brand," Mr. Kight said.
He added that the deal could help extend a financial institution's reach into the virtual community.
"Progressive banks can quickly leverage the power of the Internet to expand their brands," Mr. Kight said.
Citigroup and Bank One Corp. have high-profile marketing relationships with two Yahoo competitors, Netscape Communications Corp.'s Netcenter and Excite Inc., respectively.
Mr. Kight, citing a Gartner Group study, estimated that 40% of all U.S. bills will be accessible via the Internet by the end of 2000. "We have a very strong base of banks that have been pushing for this for quite a while," Mr. Kight said.
Working with a portal signals a possible switch from Checkfree's emphasis on bank cooperation to get bills distributed and paid. Mr. Kight acknowledged that some banks might view this with concern.
"There are certainly banks that wish that the Internet would slow down and view this kind of rapid movement as more of a threat," Mr. Kight said. "Our job is to work with those banks to show how this can broaden their distribution capability."
Checkfree already has a relationship with Intuit Inc.'s Quicken.com to present and pay bills through that site. Intuit owns about 19% of Checkfree.
"Quicken.com will likely be the first to offer fully integrated electronic billing and payment," Mr. Kight said.
Avivah Litan, a research director at Gartner, said some financial institutions may view the portal deal as "a good thing because it will generate more consumer traffic, more billers, and more interest."
Stephen C. Franco, analyst at Piper Jaffray Inc., agreed that larger banks would see opportunities. But he noted that thousands of midsize and smaller banks "without the financial wherewithal" to attract attention on the Internet may be at risk.
Revenues for Checkfree's second fiscal quarter, which ended Dec. 31, increased 23% from a year earlier, to $59.6 million. The company met the analyst consensus expectation tracked by First Call. The net loss was $193,000, compared with $1.1 million a year earlier.