CheckFree also has forged new strategic partnerships. The company recently added Wells Fargo & Co. to its list of financial institutions--a real coup, according to some analysts, because Wells Fargo has been a pioneer in E-commerce, and many thought the bank would build its own bill-paying system. In addition, CheckFree inked a deal with the U.S. Postal Service, which went into effect April 5, that makes CheckFree the electronic billing and payment provider for the Postal Service's Internet portal at www.usps.com.

CheckFree may be the giant of online bill paying, but the market it dominates is just getting off the ground. The American Bankers Association estimates that there are 90 million banking households in the United States. Even if CheckFree won the hearts of all 3 million who have ventured into online banking, it would be just the tip of the iceberg. Jupiter Communications predicts that by year's end the number of online banking customers will double to 6 million and that rapid growth will continue.

As a result, a storm of competition is brewing.

The next phase in the online bill-paying market is bill presentment, where a company presents electronic statements to customers--both consumers and business-to-business customers. The statement lets customers view bills online, rather than waiting for paper ones to arrive in the mail. It also lets them pay bills on the spot.

The benefits are many: Billers don't have to produce paper invoices, and customers can see monthly statements online that are updated automatically. In the case of credit-card bills, consumers can pay off balances the day before finance charges hit. For the biller, electronic presentment makes bill consolidation easier and may get customers to pay faster. "Bill presentment is the next key service in online bill payment," says GTE's Irwin. "We're waiting for CheckFree to do bill presentment; otherwise, we'll go with someone else."

Mark Argosh, consumer and small business E-commerce executive at Bank of America, says its alliance with CheckFree means nationwide bill payment and presentment is coming soon. "But remember, how fast bill presentment comes is determined by signing up billers," he says. "Billers are resistant to hooking up different systems."

So far, CheckFree has 120 billers signed up for the service. And Matt Lewis, CheckFree's assistant VP of product marketing, says the challenge of adding more has everything to do with the banks, not the billers.

"We're moving as fast as we can to offer bill presentment," says Lewis. "Our responsibility is to get banks to offer GTE and others bill presentment," he says. "Here's a challenge that competitors don't see yet, though: There's huge risk and fraud in bill presentment and bill payment." As a result, he says, it's hard to rush the banks.

Irwin says that GTE--as a major biller--is ready for bill presentment. It's the bank systems and CheckFree's own system that are lagging.

Bank of America still has a lot to do before it can offer bill presentment, Argosh admits, and customers will have to wait until at least the end of this year. "As soon as we can connect California to CheckFree systems, it will be there," Argosh says. "The East Coast banks will be easier, because they don't already have a system in place."

Kight doesn't seem to believe that the slowness of CheckFree billers and bankers to offer bill presentment is a problem. "Clearly, bill presentment is an accelerator for growth in online bill payment," he says. However, Kight says, the trusted brand name of the banks--rather than speed--is the important thing.

"Trust is an enormous factor on the Net," Kight says. "As financial institutions and other leading, trusted entities like the U.S. Postal Service add electronic billing and payment services to their sites, a new, frequent, interactive opportunity to communicate with the consumer is born. It's good for the consumer, who can now interact with financial data under a trusted, known brand."

But if CheckFree isn't ready soon, competitors plan to be. The biggest potential rival is Spectrum LLC, a company formed by Chase Manhattan Bank, First Union, and Wells Fargo that plans to develop an online bill presentment and paying system. Spectrum signed up 11 additional banks last year. But so far, Spectrum doesn't have anything close to Genesis 2000, much less the suite of services and deals CheckFree has.

CheckFree may have stolen a march on Spectrum in February when it announced plans to merge with TransPoint LLC, an online bill-paying joint venture of Microsoft and First Data Corp. Analysts say the billion-dollar merger means TransPoint may not be using Spectrum's technology for much longer.

Another competitor is Wisconsin's Marshal & Illsley Data Systems, which offers a similar online check-cutting and electronic-payment service. Marshal & Illsley has a strong presence among Midwestern and small community banks. In fact, Marshal & Illsley and CheckFree are on fairly equal footing when it comes to the smaller banks, according to research firms.

Neither of these competitors has direct links to the Automated Clearinghouse, nor direct consumer interfaces or a scalable infrastructure, which is why analyst firms such as Goldman Sachs don't see them as a near-term threat.

New companies, however, may prove more competitive, in some cases because of their business model. The most visible competition is X.com Corp., a year-old dot-com in Palo Alto, Calif. It has a bill-paying system called PayPal that handles all the transactions for eBay, the popular online auctioneer. And X.com is about to get its own bank charter, which will let it hook directly into the ACH so it won't have to wait for banks to agree to bill presentment. That may give it a serious edge over CheckFree.

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