Electronic Data Systems Inc. and Transpoint LLC - would-be leaders in on-line bill payment and presentment, behind No. 1-ranking CheckFree Holdings Corp. - are teaming up.
EDS' interactive billing services division will resell Transpoint's presentment service to EDS' biller customers and will process transactions for EDS clients that plan to work with Transpoint.
The collaboration, which was announced Monday, is a good example of "cooperative competition," said Ralph Young, executive vice president of Transpoint, an Englewood, Colo., joint venture of Microsoft Corp. and First Data Inc. that has a minority investment from Citigroup Inc.
EDS, which is based in Plano, Tex., established the interactive billing services division in August 1998. The unit has 12 customers, including Bank One Corp. and MCI WorldCom Inc.
Transpoint has 31 biller customers and can present bills through its own Web site and Microsoft's MSN Money Central personal finance site.
Transpoint and EDS say they expect their collaboration to boost the number of companies presenting bills through the Web as well as the number of Internet sites through which bills are distributed.
Mr. Young said EDS was attracted by Transpoint's plan to increase customer use of Internet bill delivery. The strategy includes a multimillion-dollar marketing campaign now under way in 12 major U.S. markets.
EDS and Transpoint "need each other right now," said Avivah Litan, an analyst at the GartnerGroup consulting and research firm in Stamford, Conn. "Everyone is doing anything they can to generate adoption and revenue."
About half of 175 large corporate billers surveyed recently by GartnerGroup said they expect to make Internet bill payment and presentment available this year. But fewer than 1% of consumers receive bills on-line, the survey found.
GartnerGroup also found that fewer than 1% of billers that offer on-line presentment had reduced the amount of invoices sent by mail.
EDS already uses services from CheckFree, Transpoint's archrival, and software from BlueGill Technologies. CheckFree, of Norcross, Ga., announced in December that it would acquire BlueGill.
In November 1998, EDS selected CheckFree to provide bill payment processing to the roughly 220 financial institutions, mostly credit unions and community banks, that use EDS' Virtual Branch home banking system.
Last May, Bank One Corp. enlisted EDS to help it offer software, consulting, and integration services to corporate clients that are billing customers through the Internet.
Despite its focus on the home banking market, EDS "has not lined up as much business as you would have thought," Ms. Litan said. "We asked billers 'Who you are using for e-billing?' and EDS barely registered."