Prodigy Going Nationwide With Its Pay-by-PC Service

A service enabling consumers to pay bills by home computer will be rolled out nationally this week by Prodigy Services Corp.

Prodigy, owned by Sears, Roebuck and Co. and International Business Machines Corp., is an information network that provides a variety of on-line services to one million consumers with personal computers.

The new service, called Bill-Pay USA, will be offered to all Prodigy customers regardless of where they bank. First reported in American Banker last month, BillPay USA is the newest nonbank entry into the growing business of electronic consumer payments.

Hanover's Role

The payments will be processed by Manufacturers Hanover Trust, which already does the processing for a number of Prodigy-based home banking programs.

The bank disburses payments to merchants, either electronically through the automated clearing house or by sending paper checks. Simultaneously, the bank withdraws money from customers' bank accounts.

Hanover has established a customer service department at its operations center in Hicksville, N.Y., to process applications to BillPay USA and handle customer inquiries.

Prodigy offered the service to a select group of customers in certain cities last month and says it has received several thousand applications.

Wells Fargo & Co., San Francisco, and NBD Bancorp, Detroit, use Hanover to process transactions, including bill payments, for Prodigy customers.

Fears Abate

Some bankers who offer home banking through Prodigy say that at first they were concerned BillPay USA would compete with their services.

But now they say the service could actually mean more customers, because it will promote home banking generally - and some banks' offerings are priced lower than Prodigy's. BillPay USA costs $9.95 a month plus the $12.95 monthly subscription for Prodigy.

"We offer NBD Express, which includes bill payments, transferring money between accounts, checking balances, etc., for $5 a month," said Charles Raphael, first vice president and head of retail delivery systems at NBD Bancorp.

"I can't imagine why anybody would sign up for it [BillPay] when ours is cheaper and has more features," Mr. Raphael said. He expressed the hope that BillPay will increase the bank's business.

Other Alternatives

Other nonbank firms such as Checkfree Corp., Columbus, Ohio, market software that customers use to pay bills from home on their computers.

And still other nonbanks, including American Express Co., American Telephone and Telegraph Co., and the regional telephone companies, are looking at offering consumers the ability to pay bills electronically from home, sources said.

Home banking by computer has not been very successful. One reason is that relatively few consumers own computers.

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