CheckFree and Bank of America rewrite EBPP contract

CheckFree and Bank of America rewrite EBPP contract

CheckFree and Bank of America have rewritten their original ten-year contract for the supply of electronic billing and payment services in the light of rapid consumer uptake and positive future growth-rate projections.

The new deal supersedes the original 10-year contract signed between the firms in April 2000, when BofA took a 16% stake in CheckFree and secured rights to 10 million warrants. It has been redrafted to reflect mass-market uptake and the economies of scale and operational efficiencies achieved by CheckFree in the intervening three years.

Specific terms of the agreement were not disclosed, however primary revisions relate to the introduction of new transaction-based pricing and a redrawing of CheckFree's original service level agreements for systems availability and e-mail response times. In return, Bank of America is relinquishing its rights to five million of the original 10 million warrants outlined in the April 2000 agreement.

CheckFree asserts that the bank's minimum annual revenue commitments remain in place at $50 million per year and reports no changes to its previously announced financial expectations for its current fiscal year. CheckFree shares recently rallied on the back of Bank of America's acquisition agreement with Fleet Boston Financial amid expectation that Bank Boston will move all of its bill-free customers over to CheckFree.

Earlier this week FleetBoston moved to drop the monthly $4.50 fee for all customers using online bill payment. The move echoes BofA's initiative in May last year which prompted a surge in user numbers.

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