Recognizing the increasing popularity of electronic billing and payment
services, Bank of America
Thursday took a 16 percent stake CheckFree Holdings Corp. in a
deal valued at $395.6 million.
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.
Bank of America customers will be able to access electronic billing and
payment services by linking to CheckFree through bankofamerica.com
delivering the familiar Bank of America Web site. Customers also will
benefit from an integrated billing and payment infrastructure, CheckFree’s guarantee governing fraud and late payments and advanced
customer care capabilities such as call center Web access and payment
history.
“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.
CheckFree last inked a major deal in February when the firm snatched up TransPoint, the e-billing and payment
child of First Data Corp. (FDC)
and Microsoft Corp.’s (MSFT)
for $1.1 billion in stock.
