Bank of America Takes CheckFree Stake
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With the 10-year deal, CheckFree (CKFR) will obtain Bank of America's (BAC) electronic billing and payment assets. Bank of America will receive 10 million restricted shares of CheckFree common stock and 10 million performance-based warrants for CheckFree common stock.
To acclerate the number of consumer's making online payments, the firms will develop a new payments platform specifically for banks to extend payment services on the Internet. CheckFree and the Bank will also create e-commerce initiatives.
CheckFree Chairman and Chief Executive Officer Pete Kight said in a conference call Thursday that the goal was to allow clients to "pay everyone for everything electronically." Kight said the e-commerce services, some of which the companies expect to launch this year, will enable consumers to use their electronic banking interface anywhere they use money on the Internet, including conventional purchases, online auctions and money transfers.
"As the nation's largest bank, it is important to lead in developing new Internet capabilities for our customers. This partnership allows us to extend electronic billing and payment nationwide, and to respond to the needs of our customers for a complete solution," James D. Dixon, bankofamerica.com executive.
"Now, customers will be able to not only pay their electric and water bills online, but they can also pay their monthly Bank of America loans, credit card and mortgage bills online."
Bank of America is a provider of online financial services, with more than 2.1 million online customers. Each month, customers process more than $800 million worth of transactions through the bankofamerica.com online bill payment service.
Currently, more than 700,000 consumers are enrolled in Bank of America's online payment services. The number of these Bank of America consumers that will be added to CheckFree's 3.3 million subscriber base is expected to be around 300,000.