US e-payments vendor CheckFree Corporation has acquired PhoneCharge, a provider of telephone and Internet bill payment services, for approximately $100 million in cash.
Founded in 1994, PhoneCharge provides EBPP services to major bill senders in the telecommunications, utility, cable, financial, insurance and education sectors via its electronic bill payment platform. Access to the platform enables a biller's customers to electronically pay bills in a secure environment.
CheckFree says the acquisition expands its EBPP services to cover every channel - including online, walk-in, telephone and lockbox bill payment services - giving billers the ability to provide a comprehensive suite of payment options to their customers from a single provider.
Matt Lewis, EVP and GM of CheckFree's electronic commerce division, says: "By consolidating bill payment processing for all channels with one trusted partner, billing organisations can optimise their management of the revenue collection lifecycle for improved operational efficiency, customer service and competitive advantage."
CheckFree says it expects the acquisition, which closed on 1 January 2006, to be neutral to 2006 earnings, and accretive thereafter.
CheckFree's move anticipates a booming market for EBPP services in the US. TowerGroup estimates that 41.1 million consumer households, or nearly two-fifths of US households, embraced online bill payment in 2005. The analyst house believes that increased comfort and familiarity with online bill payment will help drive consumers toward adoption of other online services and functionalities - such as bill presentment, the use of non-traditional payment options, or the use of online account applications - in 2006.
In the year to come, TowerGroup also anticipates that the traction gained by online bill payment will continue to encourage less traditional players, such as core processors, to enter the market, while established bill payment providers evolve and refine their core business models.