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Yahoo extends online bill-paying service

Yahoo launches a new service that allows customers to receive bills over the Internet, the latest effort by a major company to encourage widespread adoption of online bill-paying services.

Yahoo launched a new service today that allows customers to receive bills over the Internet, the latest effort by a major company to encourage widespread adoption of online bill-paying services.

Yahoo and CheckFree introduced an extension of Yahoo E-bills that will allow customers to not only pay their bills online but also to easily access and view their bills. Earlier this year, Yahoo and CheckFree unveiled an online bill-payment service.

"Yahoo E-bills is part of our ongoing commitment to make online personal financial management even easier for our users," Tim Brady, Yahoo senior vice president, said in a written statement.

Shares of CheckFree shot up 14 percent to 94 in trading following Yahoo's announcement.

The move follows several recent initiatives to get consumers to pay their bills online. Last week, 11 major U.S. banks announced they were joining the online banking consortium Spectrum. Sun Microsystems and Netscape also announced plans last week to help Spectrum create an Internet billing system.

Spectrum, formed in June by Chase Manhattan Bank, First Union and Wells Fargo, will act as an exchange to route electronic bills between banks and their customers.

A wide range of companies have been drawn to online bill-paying services for its growth potential. Jupiter Research predicts that 18 million people will pay their bills online by 2003.

Charles Schwab, American Online and Microsoft are others that Banks buy into electronic
bill paying have launched online bill-payment services.

But as the online bill-payment market is heating up for investors, many consumers haven't embraced the service. One of the reasons is that too few companies are equipped to send bills over the Internet. For example, only 37 companies are included in Yahoo's service. This means to receive bills online, the account holder must owe money to one of these 37 companies.

Analysts said that infighting between banks and online bill-paying companies has prevented the establishment of standards in the industry, which are essential to attracting more billing companies.

Yahoo customers can now sign up on Yahoo's bill-payment service and set up an account. Companies signed up with the service will begin sending bills to the user's account via the Internet after a month.

In Yahoo's new plan, the company will provide customers a free three-month trial period. Following that, Yahoo offers customers two payment plans. Account holders can pay either $2 per month, plus an additional 40 cents per bill fee, or $7 a month for up to 25 payments.