Since September, CheckFree has been moving its online financial services to its new Genesis system, which CheckFree has blamed for the problems.
If there's a beneficiary from CheckFree's woes, it's likely to be TransPoint, an online billing joint venture involving Microsoft, First Data Corporation, and Citibank. TransPoint will offer outsourced online billing services to banks, once it launches.
Earlier this month, TransPoint appointed Lewis Levin, former vice president of Microsoft's desktop finance division, as chief executive officer. But the slow-starting service has yet to open its doors, although its launch is expected in the next few months.
"TransPoint is so late that it's almost embarrassing," said Aviva Litan, who follows online billing for Gartner Group.
TransPoint declined to comment for this story.
The biggest danger for CheckFree will be comments like those from Wells Fargo Bank, which has about 150,000 customers that do online banking with Intuit's Quicken or Microsoft's Money software.
"We have customers who rely on the availability of these systems. This situation isn't acceptable for us," said Wells Fargo spokesman Wendy Grover. Wells Fargo has run an online billing trial with TransPoint but not with CheckFree.
"We continue to have strong confidence in CheckFree," said Integrion spokeswoman Emily Mendell. CheckFree provides bill-paying and other services to some Integrion banks.
"If this were to be something that happened over and over again, we would have an issue," said Mendell. "We really don't think the problem is a systematic problem. It's a one-time glitch."
Bank One online banking executives share that view.
"We've been working with CheckFree for nine or 10 years now, and our customers have been generally well-served," said bank spokeswoman Patricia Shafer. No more than 20 percent of its 330,000 online customers could potentially have been affected, she said. "We are certainly pleased that this is the first significant situation our customers have experienced."
Industry analysts say Checkfree's problems aren't likely to have a lasting effect on its competitive position because banks don't have many options if they want to outsource online bill-paying services.
"Where else are they going to go?" asked Scott Smith, an e-commerce analyst with Tera Group, noting that this is CheckFree's first extended outage. "Any bank or biller who understands the business knows there's a certain element of unreliability in it."
"It certainly doesn't help CheckFree's marketing, but I don't know that it's a critical factor that would kill any deal," Smith added.
Some consumers who use Intuit's Quicken or Microsoft Money personal finance software had trouble connecting to CheckFree's bill-paying service all week. The intermittent interruptions affected some customers of 21 banks that outsource their bill-paying service to CheckFree.
CheckFree spokesman Laurinda Wilson said the problems did not affect CheckFree's Web-based service, which is where most of the future action is expected in the online billing market.
Nonetheless, noted analyst Smith, the timing isn't great for CheckFree, which has been preparing for TransPoint's expected launch for months. CheckFree also is in a lawsuit with Intuit, a part-owner and partner, over who sells online billing services to Internet portals.
Gartner's Litan agrees: "It's going to get blown out of proportion because everybody's looking at it as an excuse to stomp on CheckFree because it has a virtual monopoly. They have 80 percent of bill payment and presentment.
"Confidence will be shaken, but it's not a major system crash. They're going through a major system migration, and this is the first glitch they've had," Litan added.