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MOUNTAIN VIEW, Calif. – Sometime next year, Quicken will quit supporting the QIF format that has long been used by credit union members to download transactions, opting instead to rely solely on the much-more robust open financial exchange (OFX) technology its maker helped create. Intuit had been telling online banking vendors and financial institutions that the change would be coming this year, in the soon-to-be released Quicken 2004. However, the company has decided to delay that until its following release, probably next year, to allow more time for industry participants to adopt the XML-based OFX connectivity. If they don’t, they may orphan users who upgrade to the new version of Quicken and suddenly find that they can no longer download their transactions because their online banker didn’t upgrade to the Web Connect OFX connectivity. Complicating the issue, Intuit is charging vendors for Web Connect, a cost that in many cases will be passed on to the financial institution, many of whom had never before paid to connect their members to their personal financial manager (PFM) software. That will be on a sliding scale, making it free for the smallest credit unions and up to $10,000 in the first year for the very largest that offer support for the full range of Quicken products, such as the QuickBooks business software, Intuit officials say. This should not be news to many in the industry. Every online banking vendor contacted by Credit Union Times say they have been working on the issue and many already have contracted with Intuit to offer Web Connect. There’s a good reason for that. Last year, according to an industry report, Quicken had 71.9% of the retail market for PFM software, with an estimated 15 million users. The 2.6 million users of QuickBooks small-business accounting software represented more than 80% of that niche. No one argues the improvement in functionality. But right now, Microsoft is not charging for OFX connectivity, and at least one Internet banking vendor in the credit union space says that difference might move many of those users north from Mountain View to Redmond. “Fortunately, Microsoft Money download support is still free to our credit union clients and their members,” says Robert Broadwell, vice president of PM Systems in Chapin, S.C. “We have been working with Intuit on this issue and have conveyed to them that we think the charge they are attempting to pass through to credit unions is not a good long-term strategy for the continued growth of the Quicken product,” says Broadwell, whose company provides online banking to about 40 credit unions through its WebFederal2 platform. “Traditionally, credit unions have supported downloads for Intuit products and many have supported Turbo Tax. We conveyed to Intuit that some credit unions will feel held hostage,” Broadwell says. “This would be a consumer issue across the board, not simply a credit union issue,” he says. Lots of people use such connectivity. For instance, “Denver’s largest credit union, whose online services are used by over 41,000 members per month, reports that in a one-week period, nearly a thousand of those members used online services to provide data to a PFM,” says Marcia Stanfield, chief operating officer of Sapereon, which provides online banking, network management and security services to nine credit unions out of its Colorado headquarters. She adds that while OFX is greatly superior to QIF, it takes some work to set it up. “It’s important to remember that a customized OFX server must go through the testing cycle for each PFM that will be supported. That process can take up to four months, so it’s essential to plan ahead and get started early,” Stanfield says. OFX was developed by Intuit, CheckFree and Microsoft, and the advantages over the QIF format are many, says Steve Holoien, director of financial institution connectivity and support at Intuit. Those include far more seamless movement of data between the consumer and the financial institution, including the ability to reconcile at any time and eliminating many of the problems with duplicate transactions and date inaccuracies showing up in a register as a result of QIF’s inability to discern many of the factors that OFX technology easily handle. OFX also allows such things as electronic billpay, checking cleared transactions and communicating with customer service to take place within the PFM session. “Once people get used to it, they would never want do go without that functionality again,” Holoien says. As for the charge for the service, Holoein points out that pricing for OFX connectivity has been in place since the technology emerged in 1997 and 1998. “Our pricing is very, very reasonable. And at the low end of the market, which is 80 to 90% of all credit unions, we still have a free bottom-end price that fits a large segment of credit unions,” he says. He also stressed that Intuit has been working with credit unions and banks throughout the process of implementing Web Connect, and that the reaction “has been pretty pleasant when they see the difference the functionality makes.” John Schooler, the chief technology officer at USERS in Valley Forge, Pa., is one of those Intuit has been working with on OFX since 1997. He says there are number of third-party home banking systems, of course, and each will have their own connectivity issues with OFX solutions. “We are well ahead of the game here, so this is not an issue for our clients,” he says. That’s because OFX already is supported and QIF never was by USERS “since it was our understanding that it was no longer considered a supported feature and was in a planned retirement state.” Like USERS, Online Resources is using OFX to offer such things as billpay integration with Quicken and Money and notes that since QIF was designed before online banking was even created, its abandonment is not an issue for ORCC, which provides online transaction services to about 250 credit unions. But, in case a consumer is using QIF technology, “we will be alerting users right in their online banking sessions that the change will be taking place,” says Debbie Geismar, senior product manager for ORCC in McLean, Va. At Digital Insight, provider of online banking to more than 550 credit unions, client financial institutions have been alerted to the change through “multiple client communications” that has included two Web casts so far, says senior product manager Michal Geller. DI is taking a slightly different approach than many of the others. “We have negotiated pricing with Intuit so that we can sell the product directly. Users who choose not to upgrade won’t be affected,” Geller says. Digital Insight also recently announced that it is working with Microsoft to streamline DI’s adoption of Money. The technical requirements for the two PFM platforms are much the same, because of the OFX standard, but there still remains that one big difference. “Microsoft Money assesses no vendor or credit union charges,” says John Mattes, director of product management and strategic relationships for Liberty Enterprises in Mounds View, Minn. Mattes says Liberty, online banking vendor for more than 160 credit unions, has been alerting its Web Connect-enabled customers since January that Intuit has begun charging for that service and says that so far about two-thirds have decided to keep the service, with the rest declining or not yet responding. -

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