Yodlee Heats up Bill-Pay Rivalry with Product That Eases Switching

Yodlee Inc. announced Tuesday it plans to introduce new technology that could heat up competition in electronic bill payment by letting consumers switch more easily from an online bill-payment program at one bank to that offered by another. The Redwood City, Calif.-based provider of Internet banking software says it will pilot its BillPay Account Accelerator in the fourth quarter and begin selling it to financial institutions in the first quarter of 2007. Yodlee sees the new tool as a means by which banks may be able to not only gain new bill-pay customers but also add to their base of active banking clients overall. “Where consumers pay their bills is their 'primary relationship,'” said Peter Hazlehurst, senior vice president of product development at Yodlee, in a statement. “We want to help financial institutions make it easier for consumers to pay bills with them.” Some 37 million active users paid bills online in 2005, up 36% from 2004, according to comScore Networks Inc. While so-called biller-direct sites (for example, utility companies) dominate Web-based bill payment, claiming 31.8 million users, users of online-banking sites pay more bills. With access to more billers at once, banking-site users make 14.6 transactions quarterly, compared to 4.7 for users of biller-direct sites, according to comScore. Yodlee, whose software serves nearly 7 million online users through more than 100 client institutions, says the new product should allow banks with enhanced electronic bill-payment services to overcome a major hurdle in taking share from other providers: the hassle consumers confront when they need to close an account, switch over account information, and ensure outstanding bills are paid. The product works by picking up the so-called configuration settings of the existing service, including data on paper-based and electronic payees, on scheduled and recurring payments, and on e-bill arrangements. It presents the consumer with a wizard to go through the new provider's set-up process, automatically filling in data it has already collected. At the consumer's option, the product also automatically cancels the existing service. As with other Yodlee products, Account Accelerator will be branded by banks and be available as either a licensed or hosted product. A company spokeswoman says it will carry a “small license fee” along with an unspecified fee payable only on “successful conversions.” “Contracts will vary,” the spokeswoman says in an e-mail message to Digital Transactions News. “However, we cannot disclose further pricing information right now.” Earlier this summer, Yodlee introduced new software for banks that allow customers to pay bills with credit cards, perform expedited bill payments, and manage their money (Digital Transactions News, June 27).