Through the agreement announced today, residential customers will be able to view and pay AT&T bills at any time via its Web site by year's end. Customers who pay online get discounted AT&T long distance rates.
As the nation's largest biller with 80 million customers, AT&T brings instant credibility to bill presentment, which involves letting customers view online their bills as well as details about each purchase.
"This represents the largest foray into bill presentment so far," said Scott Smith, an e-commerce analyst at Current Analysis. "I think it will make people sit up and take notice."
"It's interesting that this large biller went with CheckFree when all the fuss is about MSFDC," Smith added, referring to the Microsoft and credit card processor First Data Corporation joint venture for online bill presentment and payment.
Cliff Condon, a senior analyst for Forrester Research, applauded AT&T's discounts for online payers.
"AT&T is trying to share some of the cost-saving benefit with consumers--it's one of the most aggressive bill presentment strategies that I've seen," he said. "For CheckFree, landing AT&T is the most significant announcement they have made--by the sheer volume [of the account]. The momentum this will give them in the marketplace is pretty considerable."
But MSFDC's Warren Dent said his firm has been in talks with AT&T, and he expects both banks and billers to sign up for multiple systems, especially in the beginning.
"This will give the whole bill presentment industry a boost," Dent said, adding that a deal was not unexpected since CheckFree had indicated in its last quarterly earnings report that a major contract was pending.
Although bill presentment is a new industry, it already has attracted big players besides MSFDC, which initially raised the hackles of some banks.
Among smaller companies, Internet payments firm CyberCash has signed up utilities for its presentment service, Just In Time Solutions last month released software for billers to present bills and let customers pay online, and BlueGill offers software for billers to present bills from their own sites.
Vendors in the bill presentment market are divided into two camps: On one side are banks and popular firms such as Intuit that plan to consolidate bills from different billers so consumers can have a one-stop payment location. On the other are CyberCash and BlueGill, which promote billers using their own sites to present bills.
The AT&T deal splits both camps, as the phone company said it will post its bills on its Web site, CheckFree's sites, and bank sites that use CheckFree's outsourcing service.
Once AT&T's system is in place, customers who pay bills online can have the money automatically debited by CheckFree from their bank account.
"This deal with CheckFree is a great step forward in the transition from paper bills to electronic bill management," Dan Schulman, president of AT&T WorldNet Service and Interactive Group, said in a statement.
By the third quarter, AT&T expects to begin rolling out the payment option, which will initially be based only on its Web site. By the end of the year, customers will be able to use any CheckFree-supported Web site.
But analyst Smith warned that today's announcement is just the first step in the process.
"I'll be curious to see how well AT&T pulls it off," he said. "I've been less than impressed in its last efforts."