Even though Microsoft Corp.'s joint venture announcement with Omaha- based First Data Corp.oreferred to as MSFDCodraws praise for its intent to speed the sluggish industry adoption of electronic bill presentment and payment (EBP&P), many are suspicious of its ultimate implications. MSFDC's service "elevates" Microsoft to the position of toll-collector, placing it squarely in the center of paperless financial servicesosmack between banks and their corporate and retail customers. The good news: MSFDC will offer its service free to banks so that they can repackage the service, brand it and offer bill presentment and payment free of charge to customers, says Darren Remington, Microsoft's general manager of electronic bill payment and presentment. He says the service will also dramatically lower costs for banks to effect payments. However, should a particular customer's bank not be live with the service, it will also be available directly from MSFDC's Web site. "They've taken banks out of the loop," says Forrester Research senior analyst Cliff Condon. "Consumers can look to Microsoft as a money manager to handle their bills and totally skirt the financial institution." But Remington argues that independent service is a necessary evil; billers are simply not willing to make the investment in bill presentment if they can reach only the customers of those banks that offer the service. CheckFree vp Matthew Lewis disagrees; he says that even if billers climb on board with bill presentment, consumers won't feel safe phasing out paper until they see their trusted bank's stamp of approval on the service. Both Microsoft's Remington and CheckFree's Lewis agree that they should charge billers for their services, but only CheckFree offers banks a percentage of those fees. This may mean that MSFDC will charge billers less to participate, catering to merchants instead of banks, which arguably would have little choice but to follow their corporate customers to MSFDC. Faced with this, a number of major banksoChase Manhattan Corp., Bank of America, Citibank and Wells Fargo Bankohave joined the MSFDC advisory board. Jeanine Brown, evp of Bank of America's interactive banking division, says the San Francisco-based bank is participating in the MSFDC advisory board to learn as much as possible about the new company and "to potentially be able to influence it to our advantage as it's designed." Brown says Bank of America is waiting to find out exactly how much of their customers' billing and payment information passing through MSFDC's server is proprietary to the bank. Remington says that the bank will own its information, which technically means that the MSFDC partners can't legally republish any of it. But that may not stop them from benefitting from it; they may still have access to the customer information internally, and, therefore, should Microsoft ever choose to compete with banksoor with certain merchants, for that matteroit would have some pretty valuable information at its fingertips.

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