Wells Fargo & Co., which once helped launch an online bill payment venture to compete against CheckFree Corp., has signed a five-year contract extension with the Atlanta company.
Wells receives electronic statements from CheckFree and other vendors, including the Metavante Corp. subsidiary of Marshall & Ilsley Corp. and MasterCard International Inc.'s Remote Payment and Presentment Service. The CheckFree contract extension was announced Tuesday.
Armand Abhari, a senior vice president at Wells Fargo and its head of online bill payment, said in CheckFree's press release, "By working with multiple partners, today we are able to provide more e-bills to our customers than any other financial institution."
Though it has worked with CheckFree since 1996 to process electronic bill payments, Wells has had longstanding concerns about ceding the market to a nonbank.
In 1999, concerned about CheckFree's dominance of online bill payment, Wells, Chase Manhattan Corp., and First Union Corp. founded Spectrum EBP LLC, an electronic switch for routing billing and payment data. But Spectrum struggled as a stand-alone venture, and Metavante bought it in August 2002.
The San Francisco banking company, which has operated its online bill payment service in-house since late 2001, introduced bill presentment in May 2003.
James Van Dyke, the principal and founder of Javelin Strategy and Research of Pleasanton, Calif., said the contract extension demonstrates the increasing role of consolidated bill presentment, a field where CheckFree is the market leader.
"Wells has had some good success, and they're seeing signs of even more to come," Mr. Van Dyke said in an interview.
According to Javelin's research, consumers have long said they preferred to go to a single Web site, such as a bank's, to view multiple bills. However, in practice, they have been forced to go to individual billers' sites to view detailed information, because many banks still offer online bill payment without presentment, Mr. Van Dyke said.
In a Javelin survey of 2,800 consumers in April, 25% said they view multiple bills at a single site, versus 19% a year earlier. More than half of the consumers (59%) viewed bills at billers' sites, versus 52% a year earlier.
CheckFree said in its annual report that as of June 30, consumers could view e-bills from 296 different billers at its Web site or those of the banks or billers with which it works.
