Microsoft Corp and First Data Corp launched a new joint-venture yesterday to develop and market an Internet-based electronic billing and payment system. Neither party is discussing financial terms, but they have equal holdings in the Denver-based MSFDC.
Consumers will be able to access and pay bills through the branded home-banking services of participating financial institutions, or via the MSFDC Web-site which will pass on the electronic payments to billers.
According to Microsoft, the number of households performing online banking will reach 4.5 million by the end of 1997, and more than 13 million by 2000. Similarly, an On-line Banking Report suggests that the percentage of online banking households planning to pay bills electronically is increasing, up from 33 per cent in 1997 to 60 per cent by 2000.
Most companies continue to use paper-based billing systems, usually posting them in hard-copy to its customer-base. What MSFDC is proposing is that the whole process, from generation to settlement, go on-line. It could offer huge savings to suppliers and enable customers to pay promptly, with monitoring facilities to check progress and accuracy.
The biller would pay a ?nominal? fee to MSFDC, no more than the cost of a postage stamp, and the payee will not be charged any transaction costs. Field trials with banks and billers will start this summer, and the company?s advisory board includes AMEX, Bank of America, The Chase Manhattan Bank, Citibank and Wells Fargo. Industry associations include the American Gas Association, Edison Electric Institute and US Telephone Association. Prominent billing service providers include CSG Systems Inc and International Billing Services.
Ric Duques, chairman and CEO of First Data commented: ?This is an opportunity for First Data to bring a... new service to our financial-institution clients as well as to the billers we serve in our payment-instruments businesses... and it fits with our strategy to support Internet commerce payment transactions.?
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