Microsoft To Dominate Online Banking Access
The Age
Monday October 24, 1994
With its billion-dollar purchase of Intuit, the world's number-one software company is moving towards gaining a monopoly of online banking access in Australia, report Thom Cookes and Charles Wright.
MICROSOFT is expected to bid for a wholly owned Australian company which has a central position in electronic banking from the home - the heart of the vision of a new international financial system, which led to last week's $1.5 billion merger between the United States software giant and Intuit.
The company, Intuit Australia, has a head start in this country to achieve Bill Gates' vision of a pot of gold from online payments, through its plan to have all the major Australian banks hooked in to its online banking interface. The Commonwealth Bank has already adopted the service, known as QuickLine, and Intuit Australia's managing director, Greg Wilkinson, hopes to have arrangements in place with the other major banks by April or May next year.
QuickLine consists of some personal computer software, and a dial-up interface to the banks' computer systems. It can provide a two-way flow of information between Intuit's hugely successful financial management program, Quicken, and the banks' own financial systems. The Commonwealth Bank currently provides detailed statement information to Quicken users via QuickLine, but is examining how to include its bill- paying and electronic data interchange (EDI) facilities into the service.
Intuit Australia has a three-year contract giving it exclusive republishing rights in Australia to Quicken, as well as the republishing rights for QuickLine; but it is not included in the merger arrangements. Because QuickLine can also provide an online banking interface for Microsoft Money, which will be offloaded to Novell if the Intuit US sale goes through, it is probably a strategic purchase for both companies.
Greg Wilkinson told Computer Age he expected a bid from Microsoft in the near future. ``I can't see any other way around it. I can't see Microsoft saying `No, you guys carry on, and we'll speak to you later"'.
Buying Intuit Australia would give Microsoft control over both the dominant home-financial product (Quicken), and the most coordinated attempt at a generic online interface to Australia's retail banks (QuickLine). `` ... In the States, there are so many hundreds and hundreds of banks, it is hard to sort of nail it down, whereas in Australia you can address five banks and you've got the entire market," Wilkinson said.
Graham Inchley, Novell Australia's managing director, said that any moves by Novell to arrange local online banking facilities would not be considered until after the Microsoft/Intuit merger had been completed. A Novell-issued press release on the possible acquisition of Money mentions a ``commitment ... to providing online banking facilities to the home"; but according to Inchley, this currently refers only to the US market.
Microsoft Australia's managing director, Chris Kelliher, said that there had been no contact yet between Microsoft and Intuit Australia's management, ``... but we will obviously be talking in the near future.
``... in the spirit of the merger, I would imagine that these things would be worked out in the fullness of time to a mutually beneficial conclusion. It's not a big deal - we had the same issue with Fox, and that was all resolved, and these things are happening all the time," he said.
He added that the current Microsoft line is full speed ahead with the Money product until the Intuit purchase goes through, and that the company is committed to working with Novell to ensure a smooth transition for Money customers.
Daniel Petrie, responsible locally for Microsoft's forthcoming online service - code-named Marvel - speculated that Quicken ``could interface to something like Marvel. The reason it is such an attractive product is clearly its market share and penetration - its quite phenomenal."
And although Microsoft have been examining ways of providing an online banking interface between Australia's banks and Money, it is hard to imagine the company continuing this work with the impending handover to Novell.
In the US, analysts are already predicting the combined clout of Microsoft and Intuit will force the banks to the negotiating table, if they wish to reach their customers electronically.
Banks around the world have struggled with online services for the past 10 years, largely without success. Industry analysts claim this is due to banks trying to be all things to all customers, expending resources on touch-tone telephone banking, opening branches in supermarkets, building interactive automatic teller systems, and so on. The fear is that highly focused companies like Microsoft and Intuit will quickly establish themselves as the de facto standard by concentrating on what they do best - delivering services by personal computer.
Intuit has already made some inroads into the United States' financial system by offering services like the Intuit Visa Card, which lets Quicken users retrieve their statements by modem, and puts the data automatically into Quicken. Card holders pay a monthly charge for the statements, and Intuit gets fees based on purchases made with it. Last July, Intuit also bought National Payment Clearinghouse, a service that US banks use to let PC users with modems tap into bank accounts, pay bills and retrieve stock quotes. Interestingly, this is the same company that Microsoft used for its Bank Online service for Microsoft Money, announced in the US last December, raising the spectre that talks between Intuit and Microsoft have been quietly going on for some time.
© 1994 The Age
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