Magazine article American Banker

Sears to Test Telephone Bill-Paying with Los Angeles-Area Card Holders

Magazine article American Banker

Sears to Test Telephone Bill-Paying with Los Angeles-Area Card Holders

Article excerpt

NEW YORK -- Sears, Roebuck and Co. is planning to test a telephone bill-payment program that will be open to Sears customers from any financial institution, according to a Sears spokesman.

The service, to be marketed to Sears credit card holders in the Los Angeles area, is unusual because it will not be limited to customers of one financial institution. It will enable the retailer to gain experience with yet another type of financial product.

And the service, which will be supported by Sears' data processing facilities, will be part of the retailer's new information-services business unit, the spokesman said.

Sears is saying little publicly about the service, but the spokesman said it will be marketed soon.

Several financial institutions already offer telephone bill-payment service in the Los Angeles area, and at least one of them is not worried about Sears' entry into the business.

Telephone bill payment is one way organizations can deliver financial services directly to customers' homes. Although telephone bill payment has had a somewhat tarnished image in the industry, a few institutions have recently unveiled new programs.

It is cheaper than other, more elaborate home banking programs that, for example, rely on personal computers. And since the service uses the telephone to transmit information, it can be made available to virtually all of an organization's customers.

Howard Phillips, president of Automatic Data Processing Inc.'s home banking division in Seattle, estimates that about 400 institutions around the country now offer payment plans through the telephone.

The Sears spokesman declined to elaborate on the retailer's strategy behind the bill-payment service.

"If you want bills paid, Sears will take care of it," he said. "It would be available to Sears credit customers, whatever bank they use. It wouldn't be tied to a specific bank."

The spokesman was unsure how many Sears credit cardholders live around Los Angeles, but he observed that the company has 25 million active credit card accounts in the United States, which has an estimated 80 million households.

Sears has been calling the bill-payment service "Quick Pay." It will be separate from the telephone bill-payment service offered by Glendale, Calif.-based Sears Savings Bank, which is owned by the retailer. "A Big, Different Market'

"Basically, we are looking at a different market," the Sears spokesman said, noting that the retailer does not want to be limited to the customers of Sears Savings. "While there is some overlap, there is a big, different market to go for."

The spokesman was unsure of the bill-payment service's pricing and exact operation. …

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