In a bid to capture a share of the developing market for interactive home banking services, NationsBank Corp. teamed up with BankAmerica Corp. yesterday to buy a Connecticut personal-finance software company.
The two banks paid $35 million to buy MECA Software Inc., maker of the Managing Your Money program. MECA President Paul Harrison said the program is used by about 600,000 people, which he said is enough to claim 10 percent of a personal-finance software market dominated by Intuit Corp.'s Quicken. Microsoft Corp.'s Money program is a distant second with about 20 percent.
"Our customers tell us all the time they want greater convenience and more choices," BankAmerica Vice Chairman Thomas E. Peterson said. "Less than half of our transactions are done in traditional bank branches."
Mr. Peterson said the move was aimed at ensuring that banks would have access to cutting-edge software as the market develops for on-line banking services -- and the many millions of dollars in fees it is expected to generate.
Just last month Microsoft, in its own bid to secure a dominant position in that market, announced plans to acquire Intuit. The U.S. Justice Department is opposing the combination on antitrust grounds.
MECA has been owned by H&R; Block Inc., which said in March that it planned to sell MECA to concentrate on its tax-preparation business. H&R; Block will retain MECA's Taxcut tax preparation software.
Mr. Harrison, during a telephone press conference yesterday, did not directly answer a question about how the new alliance would go after Intuit's dominant share of the home banking software market. Instead, he said so few consumers today use the software for home banking that the alliance plans to grow by attracting people who are using home finance software for the first time.
Executives of NationsBank, BankAmerica and MECA said they will market the Managing Your Money program through other banks, as well as retail stores.
The bank connections will let customers use the software for interactive banking without changing banks. Each bank will be able to add its own features to the program.
The first phase of on-line services offered through the alliance will include electronic bill paying, balance inquiries and automatic checkbook reconciliation. Possible later offerings include on-line discount stock brokerage and insurance sales.
G. Patrick Phillips, NationsBank executive vice president, said the company has not decided how soon it will begin to offer the interactive service in Maryland; it will be introduced to NationsBank's Texas customers this fall. BankAmerica will roll out its version in California next year.