Home Account Network Inc. said Wednesday that it has agreed to buy the direct banking operations of First Data Corp.

First Data will become a minority equity holder of a new company, to be called Home Account Network, and will provide data services under a long- term contract.

The terms were not disclosed. The deal would catapult Home Account Network into a new league by adding First Data Direct Banking's 60 customers.

Only one bank is using Home Account Network's Internet software, though others, notably Bank of America, have signed up for it.

The combined operation, to be based in Emeryville, Calif., aims to have 200 financial institution customers and a $17 million profit this year, said Charles A. White, chief executive officer of Home Account.

Before heading Home Account Network Inc., Mr. White was president of electronic commerce payment services at First Data, which owns the largest bank credit card and merchant processing businesses, among other things.

When Mr. White left for Home Account last year, one of his missions was to unite it with First Data Direct Banking, said the latter unit's president, Randy Kahn.

The new company would offer Internet banking software for in-house use or through a service bureau.

It would primarily serve mid-size institutions that are "wrestling with how they will do Internet banking," Mr. White said. "Strategically they want to bring it in-house, but they don't have the technology and support to do it."

Octavio Marenzi, research director of Newton, Mass.-based Meridien Research, said the union of Home Account's in-house software with First Data Direct Banking's service bureau could provide a competitive edge. "No one else is doing this well or seamlessly right now, under one roof with one set of people" he said.

The combination is the second in recent weeks to suggest that the home banking systems market is entering a consolidation wave.

Intelidata Technologies Corp. and Home Financial Network Inc. announced a merger agreement on April 19, uniting Intelidata's back-end processing and middleware specialities with Home Financial's front-end client banking software.

Mr. Marenzi said he expects further consolidation and some exits from the business. "You can already see who the major players are.

At the high end it's Security First Technologies Inc. and Edify Corp., and on the lower end it's companies like Digital Insight."

Home Account Network's only live client is First Tennessee Bank. Bank of America has committed to using the company's Canopy Internet banking products.

First Data Direct Banking surpassed its goal last year of signing a bank a week. Mr. White wants to accelerate that to an average of 1.5, to get more than 70 new clients this year.

The company plans to hire 60 employees and put a First Data Direct executive on the board of directors, Mr. White said.

Mr. Kahn, who will be executive vice president of Home Account, said it promises to make on-line banking a profitable business. "It's just a matter of changing the perspective of Internet banking from a cost center to a profit center."

Home Account Network has also entered into an agreement to resell Checkfree Holdings Corp.'s E-Bill electronic billing and payment services as part of of its Canopy offerings.

A formal announcement is planned for today. Mr. White said the combination of E-Bill and Canopy would enhance the competitiveness of Home Account customers.

"We believe that on-line bill payment and presentment will play a major role in the attraction of consumers to Internet financial services," he said.

Atlanta-based Checkfree has contracts with 49 billers to use E-Bill. Among them are AT&T, Chase Manhattan Corp.'s credit card unit, and Countrywide Home Loans.

First Union Corp. and Bank One Corp. send on-line bills to consumers with E-Bill.

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