Sun Microsystems, Inc. and AOL subsidiary Netscape announced today that they are joining forces with three top U.S. banks to create a new online bill-paying service.
The companies said that New York-based Chase Manhattan Corp., First Union Corp. of Charlotte, North Carolina and San Francisco, California-based Wells Fargo and Co. will use the system. The three financial institutions have already formed a consortium known as Spectrum to create standards for online bill paying.
Meant To Simplify
The alliance between the two companies is an effort to make it possible for hundreds of thousands of online customers of the three banks to pay bills to merchants who are set up to accept such payments.
As part of the agreement, Sun and Netscape will offer their iPlanet BillerXpert Consolidator software for presenting and obtaining payment on bills to retail banks throughout the U.S. The software is already being used by First Union and is the first to support the Spectrum standard for Internet billing.
The program will enable banks to send their corporate customers bills via the Internet. In addition, consumers will be able to link to an online banking site to view a summary of bills from their telephone companies and utilities.
The deal represents one component of creating a software system that banks can use to sign up customers and merchants. On the consumer side, AOL recently announced plans to develop the consumer market for such bill-paying services by striking a deal with Intuit, Inc., the financial services software company. The company plans to make the service available to users by early 2000.
AOL Playing Catch Up
Meanwhile, Yahoo! began offering online similar consumer bill paying in September. At the time, industry analyst Zona Research, said that such services had the potential to change the e-commerce landscape forever.
Yahoo Bill Pay service allows users to electronically pay any U.S. biller, including companies and individuals. Those that are not able to accept electronic payments are mailed a paper check by CheckFree Holdings Corp., the third-party company providing the service.
While electronic bill payment services are nothing new, Zona Research believes that they are likely to be well received.
“Since the emerging currency for many in our culture is time, not money, we believe Bill Pay offers users advantages by eliminating many time-consuming activities associated with paying bills,” a recent Zona report said.
Although the number of households that pay their bills online is expected to mushroom from today’s 1.8 million to more than 18 million in 2003, some analysts feel that such projections are much too high — especially in light of the security issues that currently surround e-commerce.
These observers point out that as more people go online, e-marketers will have their hands full just trying to sell the masses on using the Internet to make purchases.