TransPoint Sold to CheckFree

CheckFree has bought the TransPoint electronic bill presentment and payment service in a stock transaction valued at more than US$1 billion. The deal came only two weeks after TransPoint—a joint venture between Microsoft and First Data Corporation, with Citibank as a minority investor—had released the first consumer-ready version of its service and launched a large-scale ad campaign to attract consumers. Atlanta-based CheckFree was TransPoint’s major rival; their competing technologies vied for the business of billing companies, financial institutions, and consumers. This deal, expected to close in four to six months, creates a dominant leader in a market that seems ready to take off. The three TransPoint partners together will receive 17 million shares of CheckFree stock, about 23% of the company, worth US$1 billion just prior to the announcement. CheckFree’s stock price jumped by about 50% on the news.

Since billers already working with TransPoint have deployed its Biller Integration Server (BIS) software, CheckFree has made a commitment to support TransPoint’s software and services for the next three years.