Internet portals are discovering that there is less upside to offering users access to bill-payment services than they previously believed.
Last week, Yahoo Inc. became the third major portal to drop or deemphasize bill-payment capabilities, announcing that it would no longer offer a CheckFree Corp.-supported free bill-pay service. Microsoft Corp.'s MSN.com, which also once operated a bill-payment service using CheckFree technology, turned the entire business over to the vendor more than a year ago. And AOL LLC, meanwhile, is readying a redesigned Money & Finance page that the company says will focus more on offering information than on the bill-pay service it offers using through Yodlee Inc.
Though online portals once touted their ability to link financial information with the payments capability, analysts said that portals' lack of direct connections to users' banks has made them less relevant.
Brian Nelson, a Yahoo spokesman, said in an interview last week that the Sunnyvale, Calif., company's "users came to our site primarily for news and information" and were going elsewhere to pay their bills. A CheckFree executive put it more starkly: "I really don't think that there is that compelling of a value to the portal sites right now to provide those financial services."
Yahoo introduced its bill-pay service in 1999, largely mirroring the capabilities of bank sites. It routes payments through CheckFree, the top bill payment service provider. It will remain up for registered users until Sept. 14, according to a notice posted on Yahoo's Web site last week.
Justin Merickel, the managing director for Yahoo's finance category, cited the fact that many banking companies are its advertisers. "We're not trying to compete with them in terms of services," he said, and bill pay did not fit with this strategy. "I don't think that was ever where our focus was."
Though he would not say how much banks spend advertising on Yahoo, "their marketing investment is certainly picking up."
The company would not say how many people use Yahoo's bill pay service.
However, Bob Homer, the vice president of product management in CheckFree's electronic banking services division, said Yahoo's bill-pay volume was "very low" compared with services offered through bank sites.
Yahoo and other portals have found that consumers have little interest in using their sites to pay bills, he noted.
"Portals were quite hot at one point, where everyone thought everything was going to occur through a portal," he said. But today, "consumers are turning to the online channel to pay their bills through their trusted provider, and really, that is the bank."
At a bank site, "it's all there for them, that whole relationship that they have with their financial institution," Mr. Homer said.
Mr. Homer said that CheckFree once supported a bill-pay service through Miscrosoft's MSN portal; though MSN continues to feature MSN Bill Pay on its finance page, he said that CheckFree has hosted, operated and collected all the revenue from the service for more than a year. (A Terms & Conditions link takes visitors to a page operated by CheckFree.) MSN did not provide an executive to answer questions about its bill-pay service on Monday.
AOL has offered a bill-pay service since 2004, and though the Dulles, Va., online company has no plans to shut it down, Martin Moe, the senior vice president of AOL Money and Finance, said in an interview last month that offering the service is not his unit's main focus. The service uses aggregation technology from Yodlee to create electronic bills using data drawn from billers' sites.
AOL is planning to roll out an updated Money & Finance page this month, and Mr. Moe said it would focus on giving users more of the financial content that it provides now, including news, stock prices finance-themed blogs and quizzes to test users' fiscal savvy.
The goal is to create "a full-service finance destination, a finance portal," Mr. Moe said. "The bill management and payment piece is part of rounding out a full-service offering," but information is the main attraction.
Penny Gillespie, the president of the advisory firm Gillespie International Inc., said that most consumers prefer to pay bills through bank sites. "Folks like to check their balances before they pay their bills, and it's a lot easier to do from a bank site," she said.
Portals that use CheckFree also come up short compared with billers' sites, she said, which generally acknowledge payments immediately. "You have all of the banking shortcomings on settlement without any of the banking feature function sets that may make" portals more enticing to users, Ms. Gillespie said. (AOL's service, which works through biller sites, offers immediate acknowledgement.)
Google Inc. does not offer a bill-pay service, but it does have a payment service for online purchases, Checkout. Tom Oliveri, the marketing lead for Checkout, would not say whether Google plans to add bill-pay to Checkout. "There are a lot of different directions that it could go," he said, but they would be based on Google's perception of its users' needs. Checkout was designed to facilitates purchases of its advertisers' products; it is aimed at driving up the search engine company's advertising revenue rather than at luring shoppers.
Dan Schatt, a senior analyst at Celent LLC, said that while AOL is still committed to its service, "at the end of the day, AOL, like Yahoo and MSN, is a portal, and I would expect that they're having a harder time to try to lure customers in to do bill payment with them because it's not a natural place to do it."
