Magazine article American Banker

MasterCard Bill-Pay Service Seen as CheckFree Peril

Magazine article American Banker

MasterCard Bill-Pay Service Seen as CheckFree Peril

Article excerpt

MasterCard International on Tuesday unveiled an electronic bill payment and presentment service that observers said may pose the most significant threat yet to CheckFree Holding Corp.'s dominance in that market.

The engine behind the credit card association's effort is its Remittance Processing System, an electronic bill payment service that processed 23 million transactions in the fourth quarter.

The Purchase, N.Y.-based association has enhanced the RPS system to let the 1,900 billers using it present invoices to consumers.

The addition of bill delivery services to MasterCard's current payment capabilities "in my mind is the biggest threat to CheckFree," said Avivah Litan, a director at GartnerGroup Research, though she questioned whether MasterCard would be able to deliver on its promise. "The reason they are such a formidable competitor is that they have already built the network connecting banks to billers," she said.

CheckFree has electronic payment connections with more than 1,100 merchants, well short of the base of billers to which MasterCard delivers electronic payments.

In fact since 1993 CheckFree has been one of the biggest customers of MasterCard's RPS for sending payments to billers, Ms. Litan said.

MasterCard's Remote Payment and Presentment Service is to become available in September. The association, which also has electronic connections to most major banks, is to connect billers with bill-payers.

Banks that are connected to MasterCard RPS would pull invoice data from billers through the Internet, allowing their retail home banking customers to view and pay their bills electronically. …

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