Intuit, which owns 20 percent of CheckFree, filed the suit in March over CheckFree's negotiation with an unnamed Web portal. Intuit contended their contract required CheckFree to include Intuit in any negotiations with portals that want to present utility, credit card, and other bills so visitors could pay them.
Terms of the settlement were not disclosed, although the companies said no payments were involved.
"We had an honest disagreement about how to apply our contract in a rapidly-changing environment," CheckFree chief executive Pete Kight said in a statement.
Added Bill Harris, Intuit's chief executive, in the same statement: "We are pleased to be back on track in our relationship with CheckFree in a manner that benefits both companies."
Intuit's suit also disclosed that CheckFree had negotiated an electronic billing presentment and payment deal with Yahoo. After the fact, the suit said, Intuit had consented to the Yahoo-CheckFree negotiations but filed the lawsuit in San Jose, California, when CheckFree opened talks with another portal.
CheckFree's stock, which fell 19 percent in the two days after Intuit filed the suit, climbed 1.7188 to 50.0938 in early trading today. Intuit's stock fell 2.5625 to 76.6875 in early trading.
Although the market is small now, 15 million households will regularly view some of their bills online by 2002, according to Jupiter Communications.
Electronic billing and payment is emerging as a hot market in online financial services. It allows consumers to receive routine monthly bills online, then pay them from their Web browser. That saves money on postage, printing, and handling for billers like utilities and credit card companies, and it makes it easier for consumers who don't have to look up amounts owed on paper bills, then enter the sums into their PC.
Financial institutions and Web portals are vying to become a place where consumers can go to view and pay all their bills in a single location. Banks see themselves as logical hosts because they already have financial relationships with both billers and consumers. Portals see online billing as a way to draw repeat traffic, as consumers return monthly to pay bills.
Intuit said last week that it's testing online billing and payment from its Web site for a handful of billers that have signed up with CheckFree to present their bills online. Intuit plans a full-scale launch of the service in July.
CheckFree is vying with Microsoft joint venture TransPoint to sign up large numbers of billers to present their monthly bills online. That way a bank or portal can go to one of those "consolidators" or wholesalers to sign on a stable of billers rather than signing up each separately.
TransPoint, which counts First Data Corporation and Citigroup as owners in addition to Microsoft, also positions itself as an outsourcing service for banks and financial institutions that want to offer online billing and payment.
In addition, TransPoint last month said consumers can pay bills directly from its Web site for three billers, with more to come online as soon as this week. CheckFree has been presenting bills on its Web site for consumers to pay since March 1997.