Magazine article American Banker

CheckFree Ends Subscriber Drought with 9% Jump

Magazine article American Banker

CheckFree Ends Subscriber Drought with 9% Jump

Article excerpt

CheckFree Holdings Corp. said the number of people subscribing to its electronic bill payment services increased by 9% in the quarter that ended March 31, with sign-ups through banks stronger than anticipated.

"We saw our highest sequential quarterly subscriber growth in eight quarters," said Peter Kight, chairman and chief executive officer, during a conference call Wednesday on the company`s earnings in its fiscal third quarter.

The surge to 3.3 million accounts eased concerns about CheckFree. Its subscriber total did not grow in the preceding two quarters, and its growth had been in the 5% to 6% range in the year and a half before that, according to James Marks, an analyst at Credit Suisse First Boston.

"The subscriber growth reflects about 2 percentage points better growth through our banking channel than we anticipated," Mr. Kight said.

But Mr. Marks warned banks against becoming complacent in marketing electronic billing services.

He said he believed that increased Internet use by consumers was the greatest contributor to CheckFree`s subscriber growth.

"The challenge for all banks is to figure out how to take this channel and make it work a lot better," Mr. Marks said. "E-Trade is marketing this aggressively, the other online brokers are, and the portals are. If banks do not start pouring marketing dollars to get the penetration rate up, they will start losing checking relationships."

CheckFree, based in Atlanta, reported revenue for the quarter that ended March 31 of $79. …

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