MasterCard invests in mFoundry

MasterCard has made an investment in mFoundry, the developer of mobile banking, payment and commerce solutions that created the Starbucks mobile payment system. MasterCard also seems to be interested in mFoundry's relationships with hundreds of banking institutions that have created their own branded apps. 

Intel Capital, Fidelity Information Services and Motorola Mobility also are said to be part of the funding round for mFoundry. Previous investors include PayPal and NCR. The list of backers illustrates some of the dimensions of the developing mobile commerce ecosystem, which includes mobile handset, payment clearing network, retailer terminal, mobile wallet and mobile advertising and marketing functions as well.

For the past five years mFoundry has been developing mobile banking applications for banks that typically enable users to check their balances and conduct other financial services from their phone.



Going forward, MasterCard wants to work with mFoundry to enable those applications to make payments at the register using MasterCard’s near-field communication (NFC) technology called "PayPass." MasterCard invests in mFoundry

U.S. Mobile Banking Grows 21% in 6 Months

There's a big difference between mobile banking in the United States, and mobile banking in many other countries of the developing world. In the U.S. market, mobile banking is mostly about offering consumers convenience and operating a bank at lower cost. In developing markets, mobile banking is primarily about the basic ability to transfer money safely and reliably between two people, or between a consumer bank account and a recipient organization.

In basic terms, in the U.S. market, mobile banking is about checking balances and moving funds between accounts. It is expected to become quite a bit more transaction oriented over time, but for the moment, it largely is a matter of information retrieval, with the modest addition of ability to move funds between a user's accounts.

Nearly 14 percent of the total U.S. mobile audience (32.5 million users) used mobile banking services in June 2011, up 21 percent from the fourth quarter of 2010.

Mobile credit card services saw an even greater increase, with 18.4 million mobile users accessing credit card information, up 23 percent from December 2010. Mobile auto and property insurance services also exhibited strong gains as 7.2 million mobile users accessed insurance information on their devices, a 19-percent increase. Mobile Banking App Usage in the U.S. Increases 45%

Mobile Financial Services Usage 3 Month Avg. Ending June 2011 vs. December 2010 Total U.S. Mobile Subscribers Ages 13+ Source: comScore MobiLens
Mobile Financial Services CategoryAccessed in the Past Month	Unique Mobile Audience (000)
	Dec-2010	Jun-2011	Percent Change
Banking Information	26,765	32,451	21%
Credit Card Information	14,931	18,356	23%
Auto or Property Insurance Information	6,041	7,169	19%
Brokerage or Stock Information	8,695	9,576	10%

Africa leads in mobile money deployment as users hit over 40 million | Mobile Money Africa

The United Nations Conference on Trade and Development (UNCTAD) says Africa is leading the trend with 51 mobile money systems in place, and as many as 37 of the deployments being in least developed countries (LDCs). Africa leads in mobile money

According to data from the GSM Association, some 109 such deployments had been implemented as of April 2011, spanning all developing regions. Only 11 of these are in developed countries, for perhaps logical reasons. 


Mobile payments systems that allow people to use their mobiles as a payment mechanism make the most sense in regions where banking and payments infrastructure is relatively undeveloped.

Africa is leading the trend with 51 mobile money systems in place, and as many as 37 of the deployments are in least developed countries, says the UNCTAD report.

Three broad categories of services now are coming to market. Money transfer services (domestic and/or international) are one type of application.

Payment services (for airtime top-ups, bills, salaries, and other goods and services) are a second type of application.

Use of mobiles to support financial services (savings, credit, insurance) are the third major type of application. Domestic money transfers, airtime and bill payments are the three most common services currently offered. You can view the report here. 

Mobile Wallet or Mobile Payment: What Wins in South Africa?

Sparring between contestants in competitive markets is not unusual. Neither are arguments that one or another approaches will not work, or that some approaches are "better." So it isn't unusual that a provider of one method argues the other methods "won't work" in a particular market


Standard Bank operates its own virtual currency "mimoney," which consists of a voucher number delivered to the recipient's cell phone using a text message. SMS. The bank has also teamed up with retailer Spar on a peer-to-peer money transfer service, in which SMS vouchers are redeemed at Spar stores throughout the country. 

Explosive growth in pre-paid money vouchers in South Africa has killed the mobile wallet as a viable payment instrument, says Herman Singh, CEO of Beyond Payments, a unit of Standard Bank.


Singh says that over R100 billion is generated in sales of prepaid airtime and electricity annually, while over 2.5 million money vouchers valued at over R4050 each, are created and redeemed every month in South Africa.

There are a couple of noteworthy angles here, including the use of a virtual currency mechanism and simple text messaging for communications, as well as the prepaid method of payment.

There is, to be sure, a clear argument that the leading developments in developed markets now are different than in developing markets. Mobile wallets and retail payments are bigger in developed markets because "banking and payments" are not "problems," while in developing markets these are key issues.

Likewise, the preferred communication technologies in developed markets are different from developing markets. Text messaging is ubiquitous for users of feature phones that are typical in developing markets. Other technologies are feasible in developed markets where smart phones rapidly are becoming the norm.

As a rule, mobile commerce, including both mobile payments and mobile wallet components, is a bigger issue in developed regions, while mobile banking--in particular remote payment--is a bigger opportunity in developing regions.

Pre-paid vouchers displace mobile wallet demand in South Africa

Mobile Operator Econet Wireless Launches Mobile Banking Service

Zimbabwean mobile operator, Econet Wireless has launched its mobile money transfer service, Eco-Cash.

Strive Masiyiwa, Econet Wireless Founder 

Eco-Cash officially was launched on 30 September 2011.

According to SWRadioAfrica, Econet, which has a subscriber base of more than 5 million customers, launched this service last week. Information on its website says the mobile cash transfer facility does not mean a subscriber has to open a bank account.

The new service will allow users to send and receive money, buy airtime, and make other payments using their mobile phones. Customers using EcoCash can also move money across different Zimbabwean mobile networks.

Econet Wireless launches mobile banking

Virtual currencies and social network payments

If you are a bit confused about the ramifications of mobile payments, so is just about everybody else. The common sense notion is that "mobile payments" is principally about using a mobile phone, in some way, to buy things, in scenarios where cash, a credit card, a debit card or perhaps a check typically is used instead.

At least part of what some of us might say is growing confusion about mobile payments is that "payments" are part of the "buying," "shopping" or "commerce" activity, and there now are growing ways to embed "promotion," "coupons," "offers," "daily deals" and "loyalty" into a shopping experience. You hear the term "mobile wallet," for example, which is how some of these related processes might be integrated and handled in the future.

To complicate matters further, shopping for "virtual goods," or "content" goods, as well as real world goods, are seen as essential parts of the mobile payments business. In other words, you might use your mobile to checkout from a retail location, buy a song or video, as well as purchase virtual goods for use in a game that is played on a mobile.

Then consider a growing interest in the ability not only to buy virtual goods with real money, but then to export virtual money to other applications or retailers, in some cases as another version of virtual currency, but possibly even as "money" in the classic sense.

You can go into a Wal-Mart right now and pay cash (or check) for a Facebook payment card, to be used in virtual gaming with such companies as Zynga. That doesn't seem to trouble regulators. But many believe there are advantages to allowing points, credits or tokens to be accumulated and then redeemed back into some form of actual real world currency. And that means there now are banking and other regulations that come into play.

Virtual currencies and social network payments

Rogers Communications Seeks Bank Status

Rogers Communications has applied to become a bank under the Canadian federal Bank Act. If approved, the proposed "Rogers Bank" will focus mainly on credit, payment and charge card services. In one sense, the move is similar to any other large retail brand creating a branded charge card.

In other ways the move is more significant. Large tier-one service providers might start to find they cannot gain significant revenue growth without moving into adjacent businesses of some size and scope, already dominated by other providers. To be sure, Rogers is proceeding carefully.

"We have no plans to become a full-service deposit-taking financial institution," Rogers Public Affairs Manager Carly Suppa said. "The license, if granted, would give us the flexibility to pursue a niche credit card opportunity to our customers should this make sense at a future date."

In other words, Rogers doesn't want to become a full-fledged retail bank. But becoming a credit card issuer does set Rogers up for a smooth transition to becoming a mobile payments provider in the future.
Credit cards present a distinct opportunity for Rogers to expand its reach, as the media, cable and wireless giant also owns the Toronto Blue Jays and has direct relationships with millions of customers, including many who pay bills using credit or direct-deposit accounts. So there is an incremental opportunity to capture some of the current transaction revenue, at the very least.

Beyond that, analysts say the company can build a broader card business by leveraging those relationships to market its brand of cards, especially by reaching out to customers who have good credit standing in its database. That would create a new revenue stream for the broader number of retail transactions for which its customers use credit cards. Rogers to become a bank

The move by Rogers is highly significant, as it illustrates an important point about where large tier-one providers must look for revenue growth. For an organization such as Rogers, which might book $12 billion in 2011 revenue, even interesting new lines of business that produce scores of millions to hundreds of millions worth of new revenue are too small to "move the needle" overall.

The problem is even worse for organizations such as AT&T or Verizon that book $30 billion to $40 billion a year in revenue. Simply put, there are few realistic new lines of business large enough to matter. That is why you hear so much about machine-to-machine communications, mobile advertising, mobile banking and enterprise-oriented cloud services. Each of those businesses could, in principle, produce $1 billion a year in incremental revenue for any single contestant in a national market.

Keep in mind the scale requirements. A business has to be big enough to produce $1 billion in incremental revenue for each contestant that wishes to compete in the business. By definition, any new line of business must be capable of generating global revenue in the scores of billions of dollars.

To repeat, Rogers will become a bank. It will do so because even "mobile payments" might not produce enough incremental revenue to be interesting. Instead, Rogers will have to explore ways to earn incremental revenue in a range of traditional banking services that match its capabilities in mobile services.

There are some obvious implications. Isis, the joint venture between AT&T, Verizon Wireless and T-Mobile USA, has shifted from a "mobile payments" to a "mobile wallet" focus. The implication is that Isis has decided it does not have time nor money to challenge Visa and MasterCard directly, which it was its original plan.

Even though that is an arguably wise move, the point remains that even a mobile wallet model might not produce revenue large enough to matter. That is not to say a wallet effort could not do so, but that it would have to create a huge advertising ecosystem.

At some point, even Isis might have to consider whether it must become a bank, or that its partners separately might have to become banks. That would still leave them as partners with Visa and MasterCard. But it would not allow Isis to completely avoid all conflict with banks.

Many service providers outside the United States probably are "running the numbers" and coming to similar conclusions.

Rogers applies to become a bank

Remote Deposit for Mobile Banking: Potential "Killer" App

You might have encountered remote deposit capture at an automated teller machine, where the ATM scans a check, or takes a picture of the front and back of a check, and sends it into the cloud for deposit, giving you a copy of the photo? Some think that sort of feature, available on a mobile phone, could be a "killer" app for mobile banking, which today in the U.S. market mostly offers ability to check balances and conduct other simple operations from a mobile device.

But what if banking services also included the ability to snap a picture of a check, send it into the cloud, determine validity of check and get instant funds deposited to a mobile account. That might not be so valuable in the U.S. market, but could be quite useful in many parts of the world where the banking system is undeveloped.

Is Remote Deposit Capture the Killer App for Mobile?

“PayNearMe” at 6,000 7-Eleven Stores, Supports Mobile Money Transfer and Payments

PayNearMe offers a take on mobile payments that is more a “virtual cash” play than anything else, likely to be most successful with consumers who prefer paying cash to third parties, especially when buying online digital goods or make other payments, and do not own or cannot get, credit or debit cards. That could include teenagers and others. See http://www.paynearme.com/press_releases/press_release_11_16_10_B


Using only their mobile phones and the new, free PayNearMe Card, consumers can complete transactions with a growing list of payees, including Amazon.com and Facebook, Progreso Financiero, MOL AccessPortal (MOL), m-Via, Lexicon Marketing, LLC, Adknowledge’s Super Rewards, Money to Go and SteelSeries.

More than 50 percent of U.S. adults prefer cash for payment and a quarter of U.S. households lack credit or debit cards. That creates the opportunity for secure and convenient ways to complete remote transactions with cash.


The PayNearMe card is one such solution. When buying something on online site SteelSeries, for example, the consumer would go through the regular check-out process, but instead of clicking Visa or MasterCard, they would choose PayNearMe.  See http://emoney.allthingsd.com/20101223/how-one-company-wants-to-make-cash-cool-again/?mod=ATD_skybox


Then he or she would print out a barcode and bring it to any 7-Eleven location. The clerk scans the barcode and collects the cash. As soon as the balance is paid, SteelSeries will be notified and the item will be shipped.

If a user does not have a printer, or is making a money transfer, users go to a 7-Eleven where plastic PayNearMe cards–similar to gift cards–are available.


They call customer service and say the code on the back of the card, how much money they’d like to transfer and where they’d like to transfer it. The 7-Eleven clerk then scans the card, collects the cash and prints out a receipt with all the legally required information.


Unlike gift or prepaid cards, PayNearMe Cards simply enable mobile cash payments in any amount from $.01 to $1,000. There’s no stored value, no hidden fees, no unused balances.


In some ways, PayNearMe is sort of a mobile “money transfer” service, in part a micro-payments service.

Mobile Banking for the "Unbanked" in South Africa

Mobile Banking in Kenya

India Mobile Banking Gets Boost from Bharti Airtel and Vodafone

“Mobile payments will be the next step for delivering financial services to hundreds of millions of 'underbanked' people or those who are under-served currently, both urban and rural customers, especially in emerging economies," says Gerhard Romen, Director, Mobile Financial Services, Nokia.

Recently, mobile banking got a huge boost with Bharti Airtel and Vodafone announcing separate partnerships with State Bank of India and ICICI Bank, respectively. While Bharti Airtel and SBI have formed an exclusive joint venture, Vodafone has agreed to become a "business correspondent" for ICICI Bank.

While Vodafone manages over 1.5 million retail points for acquiring customers and servicing them, Airtel is present across 5,101 towns and more than 5,00,000 villages. That's a big deal considering that 51.4 percent of 89.3 million farmer households do not have access to any credit from institutional or non-institutional sources. 

Only 27 per cent of farm households are indebted to formal sources. Only 13 per cent are availing loans from the banks in the income bracket of less than Rs 50,000. 

There's money in the mobile

M-PESA is the Model for Perhaps 60 Other Ventures

The M-PESA money-transfer service, operated by Safaricom, Kenya’s largest mobile operator, is used by 9.5 million people, or 23 percent of the population, and transfers the equivalent of 11 percent of Kenya’s GDP each year.

See presentation for a description of how it works.

The basic idea of M-PESA is that the 100,000 small retailers in Kenya who already sell mobile-phone airtime, in the form of scratch cards, can also register to be mobile-money agents, taking in and paying out cash. More than 17,600 retailers have signed up as M-PESA agents—far outnumbering Kenya’s 840 bank branches. When a customer is registered with the system, paying in cash involves exchanging physical money for the virtual sort, called “e-float”, which is credited to his mobile-money account. E-float can then be transferred to other users by mobile phone, and exchanged for cash by the recipient, who visits another agent.

read more here

Mobile Banking and Payments: Will Carriers Partner or Compete?

 There's an undeniable argument that mobile phone companies could, in the future, threaten banks by introducing their own mobile payment systems. There's probably an equally compelling argument for mobile carriers working with payment processors. Patrick Dixon offers his thoughts.

Lots of Subtleties to Mobile Banking

Mobile banking, some would argue, is not as obvious an opportunity for U.S. application or service providers because the banking infrastructure is well developed, in obvious contrast to the situation in many other parts of the world, where the mobile essentially "is" the banking channel.

The more-subtle observation is that the infrastructure an application provider puts into place to support mobile money transfers of various types also can be leveraged for loyalty campaigns, coupon distribution and other marketing campaigns.

Over time, we'll see how things develop, at least in the U.S. market, where it seems likely most of the value payment processing represents has yet to be "surfaced."