StreetOwl Gamifies Driving to Improve Safety and Lower Insurance Premiums

imageDuring the past few years, I’ve unleashed two teenagers on the streets of Seattle (sorry). They are careful drivers, but they are very inexperienced. Both would rather hop on the bus, or let me drive, than navigate the congestion, curves, and freeways of Seattle. StreetOwl's RefuelMe app

The younger one is still in the permit stage, so he doesn’t have free rein quite yet. But once he becomes fully licensed, I’d love to get tangible feedback on his driving to make sure he continues to play it safe. And I bet our insurance company would like that info even more.

So, the smartphone-based auto-tracking systems seems like a win-win, at least for the parents and their insurance company. But San Francisco-based StreetOwl (note 2) has figured out a way to make it a win for the kids too. The company uses an age-old tactic: bribery.

Its RefuelMe iPhone app tracks driving behavior, earning points for proper speed, acceleration, braking and cornering (see below left). It’s a lot like the Fitbit exercise tracker, which I’ve become obsessed with quite fond of recently.

Young drivers earn awards established by their parents. In the example below right, you can see that the driver is about 1% of their way to earning a $25 Chevron card. Results are tracked both in app (parent and child versions) and at the RefuelMe desktop dashboard.

The company plans on keeping it free and is looking to partnerships with high schools and others to get it in the hands of more teens (and their parents).


While I think most parents see the value here, it’s also a difficult concept to monetize. There is a real education challenge to get trial, and an even harder problem of getting people to pay for it.

So the company has developed a version that is more tied into insurance savings, which has universal appeal. The idea is that the app can prove to the insurance company how super safe your driving habits are, then you can be rewarded with a lower price. And since Smart Owl is serving as a value-added matchmaker, they can be rewarded handsomely by the carrier (see last screenshot below).

Initially StreetOwl sees this a lead-gen program. But the startup is also in discussions with insurance companies about using the technology in place of dedicated hardware to power usage-based insurance. It could also be bundled with youth banking programs and/or PFMs as a value-add.

You can give RefuelMe a test run now. But the insurance lead-gen product is still in private beta and is expected to be released wider within a few months.   


RefuelMe iPhone app (18 April 2013)
Left: scoring system                                          Right: Dashboard with rewards

StreetOwl safe driving algorithm     StreetOwl scoreboard app

StreetOwl website

StreetOwl website


1. Hat tip to Venture Beat
2. StreetOwl is currently raising $750,000 in seed capital through Angel List. Ofer Raz and Jason Hovey are co-founders.
3. For more on banks offering insurance, see our full report here (Dec 2011, subscription)

Apple Just Put a Mobile Wallet In 100+ Million iPhones: But Is This Passbook a Friend or Foe of Banks?

iPhone Passbook app If it wasn’t obvious already, Apple is becoming the operating system of your life. And since money touches much of what we do, it’s no surprise that the company is moving into the payments side.

Actually, Apple is already there. The most valuable company on the planet is already the biggest payments issuer, with 400 million payment-enable iTunes accounts.

Now, when iOS6 becomes available this fall, Apple will be the biggest mobile wallet provider as well, when 100+ million iPhones automatically getting one with the new OS upgrade.

The new baked-in wallet app is called Passbook, I presume because iWallet was taken, or Apple is saving it for something even bigger.

But regardless of the name, Passbook has broad implications in payments and commerce in general. One look at the UI (inset) shows what banks are up against. An app loaded with store cards! Just what a gazillion big-spending early adopters have been hoping for (congrats to Target and Starbucks for leading the way again).

The main reason iWallet Passbook is such a big deal, besides the Apple halo effect, is that it automatically opens your “virtual card” when you walk in the store. Yes, you read it correctly. Automatically. Opening. Mobile. Payment card. 

Starbucks "card" in Apple's PassbookFor example, when you walk into Starbucks its virtual store card, rendered in 2D bar code, will be triggered on your phone. You just swipe the lock-screen notification, enter a PIN (if necessary), scan your phone at the POS, drink your coffee and enjoy the perks (see below).

Is the POS experience dramatically better than using your Visa/MasterCard plastic? Not really during those 15 seconds of your life, but it’s not worse either. Shaving 2 seconds off transaction time is not what this is about. It’s the retailer value-adds that make it a huge winner.

Smart merchants will tack loyalty points/rewards/amenities (how about a free shot of vanilla in that latte?) on to Passbook-enabled purchases and you will soon be conditioned to pay with your phone. Really, just having your receipt stored safely away in the Passbook app could make the difference between using the store card vs. MC/Visa.

Because Apple wants to be platform, not a bank, they are making the tools available to developers to create apps that play nice with Passbook along with all the other iPhone utilities. So I see this as bank/issuer friendly, so far anyway, though not everyone will benefit.

While this is only speculation, I see a couple things likely to happen:

1. Proprietary single-brand (closed loop) payments make a comeback: With a direct connection to the front-screen of your iPhone as soon as you walk in the door, retailers can put together compelling in-store loyalty offers on the fly. For example, I can walk into Best Buy, and up pops my store loyalty card on the front of my iPhone. And they can dangle all kinds of bennies at me in real time, while encouraging me to pay with my Best Buy credentials rendered in a QR code on the screen (and later via NFC or a “cloud” connection).  

2. Banks and card issuers partner with retailers to become the preferred “Passbook card:” For stores that don’t want to bother with the payments piece, instead of presenting a store card with the customer walks in the door, they could present the preferred partner card. For example, Costco, which only takes American Express, could launch an AmEx Passbook card when customers walk in the door.

3. The beginning of the end for paper receipts: Users will have the comfort knowing their receipts are all accessible via iPhone (and in the iCloud). So they will opt out of paper receipts at the register.

4. Mobile offers/coupons just found a new home: If you want iPhone-wielding consumers to see your offer, Apple just created an instant place to store (and discover) deals. I’m not sure if this is good or bad for ad-supported banking, but it’s something to consider.

Bottom line: I could go on (for instance about Siri integration), but my head is about to explode with all the possibilities. Time will tell, but I think we just witnessed a watershed moment in mobile-enabled shopping and payments. 


Recommended reading:

  • Read the full analysis by Glenbrook’s Scott Loftesness here.
  • Fantastic stuff on on Quora too (HT to Brad Strothkamp for the link via Twitter).
  • The list of all the features via Techcrunch.

Watching the Mobile Payments Battle Unfold

Editor’s note: This guest post was written by Daniel Thomas, a 25-year veteran of the financial services industry and a principal consultant with Mindful Insights LLC. He’s been involved in strategy and product development for Online Resources Corporation, ARINC, and TeleCheck. He recently authored a report on merchant-funded in-statement rewards for Online Banking Report.

image The Alternative Payments Systems Innovations (APSI) conference held in San Francisco last week may want to change its name to Mobile Payments Systems Innovation. It seems that all things mobile has totally eclipsed any interest in non-mobile untraditional payments.

And for good reason, the speakers and a hundred or so fully engaged attendees at the second annual APSI summit, seemed unanimously to agree that the convergence of virtual and physical purchasing, social networking, rewards and promotions will be solved by the use of mobile phones. And that is saying a lot given the mix of technology companies, payment companies, merchants and financial services companies represented in the room.

However, there is uncertainty on what exact form the eventual solutions take. But each company with an innovation is positioning themselves to be on the winning side when the dust settles and at least one prediction by chip maker INSIDE Secure Corporation’s COO Charles Watson says “it will unfold in the next 18 to 24 months to see who are the winners and losers.”

imageFor us payments geeks, it’s a little like being one of the people from the Virginia countryside who brought lawn chairs to watch the first battle of Manassas in the Civil War. We have an opportunity to witness payment history before our very eyes. For those companies that are on the battlefield, well, some will win and others will become what Steve Klebe, VP, business development and strategy at BilltoMobile calls “alternative payments roadkill.”

The key issue is control of the consumer. This is not a new issue, of course. Richard Crone’s (president of Crone Consulting, LLC) timeless mantra, “The one who enrolls (is the one who) controls” is as true with m-payments as it was with e-payments and bill payments before that. However, no longer is this control of the consumer limited to a tug-of-war between the banks and the merchants. Mobile Network Operators (MNO), handset manufacturers and even social networks are all investing in innovative new technologies and functionality to be in the best position to do the enrolling.

The technologies that are being developed to win this control tend to fall into three main categories:

NFC-enabled phones (and stickers)

Mohammad Khan, president of ViVOtech, the NFC payment and promotion solution provider says that 2011 is the year of NFC and that “by the end of the year, 60-70 million NFC-enabled phones are expected to be released–mostly in North America.” The presumption here is that consumers equipped with this new functionality will be looking for a place to use it and will ultimately drive merchants to upgrade their POS equipment to accept tap-and-go payments.

Indeed, INSIDE Secure’s Watson predicts that NFC enabled smart phones will generate the next generation of phone apps that have nothing to do with payments but will get consumers hooked on tapping (think: tapping posters to receive coupons, tapping labels on store shelves to learn about products, tapping when you walk into a store to check-in and receive offers, tapping phones with someone you meet instead of exchanging business cards, etc.) and that this acceptance by consumers will drive their demand for tapping to pay at the point of sale.

Yet other companies fail to see the value in NFC to consumers. Chris Hylen, VP and GM, Intuit Payment Solutions Division says Intuit is banking on its Go Payment card swipe system that attaches to the iPhone. They believe that in the future everyone that wants to receive money will be able to receive credit card transactions. To prove it, Hylen played this adorable video clip of girl scouts accepting payments with their device. What could be easier?

He went on to say that “NFC is a solution looking for a problem” since it is much easier for a consumer to pull out their card than it is to open their phone, go to the appropriate app, enter a password, select a payment type and then tap the phone to a POS reader. This sentiment was echoed by Vince Kadar, CEO of Telepin Software who asserted that NFC means “Not For the Consumer”.

Virtual Wallets

Okay, so maybe virtual wallets are the answer? After all what could be easier for a consumer to understand? Their phone now contains all of the information that used to be in their leather wallet. But which wallet will we use? The one promised by the group called ISIS led by AT&T, Verizon, T-Mobile, Discover and Barclays Bank? Or the one developed in the future by the partnership of Google, Citi and Verifone? Or the neutral and agnostic wallet announced and demoed at the show by Zenius Solutions President John Weise, the Zenius Mobile Wallet?

Since control of the consumer is the goal, every large merchant, mobile network operator, handset manufacturer and card issuer is going to be developing a wallet that they will want you to use as your primary wallet. How is that going to work? I can smell a new business opportunity for data aggregators like Yodlee and CashEdge a mile away, but won’t that defeat the purpose of gaining control? Somehow I can’t get the vision of George Costanza’s wallet out of my head.

Carrier Billing

The simplest solution, deemed the only “frictio
n-less” mobile payment type by the service providers that offer it, is the concept of paying for items with a charge to the phone carriers’ monthly bill. The concept is inherently secure since the payment providers have real-time access to the phone company database (and they know where you live!) and a second factor of authentication, a text message to your phone that you need to reply-to.

The companies leading the charge in this space include PaymentOne, MoPay, BilltoMobile, and BOKU. And while its true that they don’t have the problems that NFC and wallet providers have, there are currently clear boundaries to the types of items that can be bought with carrier billing services.

Purchases today are limited to small dollar (micropayment) virtual goods such as ring tones, wallpaper, game purchases (if you are one of the millions of people that like to pay to throw virtual sheep) and the like. However, you cannot buy a refrigerator at Sears. At least not until these companies work out the issues between the merchants and the carriers about who pays for fraud losses, how often funds are settled with merchants (remember you only pay your phone bill once a month and Sears isn’t going to want to wait a month to get paid for their refrigerator!) and how customer service will be handled for things such as charge-backs.


The conference concluded with a focus on major merchants and explored their needs and wants for new payment types. Representatives from Walmart, 7-Eleven, Inc., Macy’s and SUBWAY Restaurants each explained how they were looking for reduced costs, reduced lines, reliability, security, easy implementation and low maintenance associated with any new payment mechanism they deploy. In addition, they want the system to include the ability to offer rewards and promotions near-store and in-store.

That’s a pretty tall order for any new payment solution. Are the merchants being unreasonable? After all, each has tens of thousands of POS locations to worry about, employee training, employee turnover, software changes to make, capital decisions on hardware, and so on. Looking at it from that perspective, one can see why these retailers are among the many that brought extra comfortable lawn chairs to the battlefield sidelines. Maybe it won’t be such a quick war after all.


1. The conference was expertly organized by Strategic Solutions Network. Many thanks to CEO Aron Barkan along with Sara Sturman, Paula Haggerty and Debbie Bernbaum for an informative, interactive two days.
2. Picture credit: Prince William Conservation Alliance 
3. For more info on mobile banking, see our previous Online Banking Reports.

Can Banks and Credit Card Issuers Outflank Groupon with Merchant-Funded Rewards?

imageGroupon may be the biggest company in history that everyone thinks they could have built. Facebook, I guess, is up there too.

It seems everyone is wondering how they could do the “Groupon of ____” (fill in the blank). In my world, the blank is “banking.” I already wrote about the potential for selling financial products through Groupon and other flash marketing sites last July, so I won’t repeat that part. Anyway, that’s Groupon 1.0. 

It’s Groupon 2.0 that I think is even more interesting for financial institutions. The new model, coming in a few weeks, is all about mobile deals. Groupon Now mobileThe company is said to be planning on adding two buttons to your smartphone:

I’m hungry…which will alert you to nearby Groupons you can use for food deals.

I’m bored…which will alert you to just about anything else Groupon sells.

It’s brilliant. And so simple. Again, everyone will wish they’d built it. 


Banking Opportunities

So how could you do the same thing in personal finance? What would those buttons be?

  • I’m broke….leads to ATM finder, cash-back location, credit card site, loan app, friends & family loans, P2P lender, etc.
  • I’ve just been paid…leads to ATM finder, branch locations, deposit accounts, billpay, investments, automated savings plans, etc.
  • I’m out of town…leads to ATM finder, FX locations, travel services, 
    resource locator, card-issuer notifications, security preferences, etc.

But those are all pretty much standard functions of online/mobile banking today. The bigger opportunity may be to beat Groupon at the local level, with merchant-funded rewards tied to debit/credit cards (see note 1). Banks could potentially use the same “hungry/bored buttons” and direct customers to cash-back deals at restaurants and other merchants making offers to your cardholders.

Bottom line: Location-based rewards is another example of why mobile banking will be more important than online banking. To put it simply:

Banks enable commerce.

Mobile enables location-based commerce.

So financial institutions are right in the middle of a multi-billion dollar shift in retail spending. Enjoy all the opportunities!


1. For more on merchant-funded rewards, see the latest Online Banking Report.
2. Picture credit: All Things Digital

Cardlytics Partners with ClairMail to Take Merchant-Funded Rewards Mobile

image One of the best innovations to come out of this recession is in-statement, merchant-funded rewards. First-mover Cardlytics launched at last year’s BAI Retail Delivery (see post).

A year later, it was already reaching 30 million consumers  imagethrough relationships with more than 100 card-issuing banks and 100 merchants (see notes 1, 2). That’s unheard of growth in financial services. If just one-third of the 30 million customers look at their statements each month, Cardlytics would have more unique visitors than Groupon (note 3), which has been called the “fastest growing company ever.” 

We’re not saying Cardlytics has anywhere near the $60-70 million in monthly revenues attributed to Groupon, nor the $6 billion valuation. But enough similarities can be seen in their business models that I’d be very, very happy if I were an early Cardlytics investor (note 3). For example:

  • Both earn revenue directly from merchants who pay only when sales are made
  • Both leverage online channels to deliver significant discounts to targeted users
  • Both are first movers with aggressive growth tactics

And Cardlytics is different too:

  • Cardlytics focus (for now) is national merchants, whereas Groupon is closely associated with local merchants (but is adding national merchants)image
  • Cardlytics can target much more precisely and keep offers out of the hands of the merchant’s existing customers, a huge and unique benefit
  • Cardlytics does not need to market its own site to consumers; it rides on the coattails, and leverages the trust, of its banking partners

Mobile opportunity
Cardlytics operates at the intersection of payments and advertising. And while the online card statement is the place to be in 2010 (see screenshot below), clearly the future for any shopping-related service is mobile.

Although no specific products or partners were revealed, the startup signaled its intention to go mobile with its ClairMail partnership announced today (press release).

Cardlytics example: in-statement McDonald’s offer made to Burger King customers

cardlytics in-statement merchant-funded offer for McDonalds


1. Cardlytics will be demoing the latest innovations in its service at our Finovate Europe conference on Feb. 1, 2011.
2. BillShrink won a Best of Show award at Finovate Fall for its take on the concept (video).
3. On the strength of its early growth, Cardlytics landed a huge $18 million C-round in August.
4. According to Compete, Groupon had more than 8 million unique U.S. visitors in October.

Who Wins with NFC-Based Mobile Payments?

image Now we can stop speculating and begin to plan strategies for the new NFC-in-the-phone world. Google CEO Eric Schmidt announced that an NFC phone running Android Gingerbread would be available “within a few weeks.” He even demoed the NFC capability on stage on what is thought to be a new phone called Nexus S. He showed a location check-in, not a payment (see video below, first 6 minutes cover the NFC announcement).

You can be sure Apple will not let itself be out-innovated on NFC, so expect NFC on the iPhone 5 next summer. So what, if anything, does this mean for banks and credit unions?

There’s much to be determined still, depending on how much control Apple and the carriers try to exert. The Isis venture from AT&T, T-Mobile, and Verizon is an indicator that the U.S. telecom giants are actively looking to gain an foothold in mobile payments. And it’s not like the huge card issuers and MasterCard/Visa are going to sit on the sidelines. No one knows how it will play out. 

But it’s interesting to try to figure out who stands to gain, and lose, from the inevitable move from plastic to mobile device. One aspect I hadn’t though about was brought to my attention in a conversation with M-Com’s Serge Van Dam yesterday. He pointed out one likely consequence of virtual cards running in phones: the resurgence of retail store-branded “charge cards” (non-Visa/MC).   

By making store cards virtual, almost any size merchant will be able to jump on the loyalty bandwagon issuing their own virtual loyalty/charge “card” hooked directly to customer bank accounts (or PayPal), avoiding Visa/MasterCard interchange. It’s a decoupled debit play, but without the expense/infrastructure of issuing plastic cards.

Here’s my list of possible winners in the NFC world. What do you think?

Potential winners:

  • As outlined above, the small merchant that uses virtual loyalty cards (i.e., in mobile apps) to compete with the bigger players
  • Larger merchants that may be able to cut their interchange costs by routing virtual store card transactions away from MasterCard/Visa/Amex
  • Mobile payment/commerce startups and clever financial institutions (including PayPal) that figure out ways to add value in the new NFC-enabled world (note 1)
  • Mobile telecom players (carriers, networks, and Apple) that derive income from the increase in mobile commerce and advertising
  • Card issuers, if NFC capabilities drive fraud losses down
  • Consumers, who gain convenience by no longer needing to carry a wallet full of debit, credit and loyalty cards around

Potential losers:

  • Incumbent payments brands, especially MasterCard/Visa/Amex, who could lose interchange revenue to upstarts

Google’s Eric Schmidt shows first NFC phone running Android
Note: NFC demo is in first six minutes

1. My favorite quote from Google CEO Eric Schmidt’s remarks in the video above,” (NFC) will result in 500 new mobile payments startups.”
2. Picture credit:

Mobile Phones Just Keep Getting Smarter: Now Used as an Electronic Key Card at Holiday Inns

imageI love September. When I was a kid it was the excitement of going back to school, a new football season, wonderful Midwest weather, plus my birthday to boot.

Nowadays the birthday isn’t so much fun, but the weather is still fine and it’s like Christmas for new tech products. I can’t prove it, but I bet there are more major product announcements in Sep/Oct/Nov than the rest of the year combined. 

This month already, 70 new tech products launched at DEMO last week, and several dozen will debut at TechCrunch Disrupt next week. Then, of course, we have 56 new financial launches at Finovate, Oct 4/5 (which unfortunately is sold out).

Today alone, there were at least six new things I would have liked to blog about. Maybe I can get some of them into my Twitter feed at least. I have chosen the one that was the biggest “aha” moment of the day. The seemingly off topic, but oh-so-cool service, that can turn any mobile phone, yes even those low-end freebies, into an electronic hotel room key. And without any additional hardware/case/SIM/SD card or anything. It’s like magic. Watch.

They use sound to engage the lock. Aha! Would I trust the thing? Probably not, but I’d use it anyway. The key benefit (pun intended) is that you get to bypass the endless lobby check-in queue when you arrive at the hotel and simply proceed directly to your room. For that, I’d take the risk that it didn’t work. Besides, four times in my life I’ve been given a key card at the front desk that opened up on a room already occupied (see note 1), so this system can’t be any worse.

The system, called MobileKey, is being piloted for the next three months at a Holiday Inn in Chicago and Houston. It’s powered by OpenWays. When using the service, the hotel sends the guest a text message with a link that plays a unique sound that opens the door. Brilliant! 

Relevance: When your phone becomes your Starbucks card, then your airline boarding pass, and now your hotel room key, it’s only a matter of time before it becomes a mobile wallet, not only controlling your bank accounts, but also used at the point of sale for purchases. 

1. Does this happen to everyone or am I just cursed? At least three times the door was not deadbolted from inside, so I actually went partway in to the room. Once I was politely told to go away, once I was screamed at by a fellow whom I’d awakened after midnight, once the occupant was in the shower so I quickly backed out, and the fourth time there were dishes out front so I called the front desk first. Anyway, I always knock before going into my room the first time.  
2. HT ReadWriteWeb

How Many iPhone Banking Apps Will There Be?

image Are you tired of hearing “there’s an app for that” yet? Well, get used to it, we are still at the beginning of the great app rollout

Even as recently as our iPhone Banking Report published in March, I assumed most financial institutions would have a single iPhone app. One bank. One app. It’s how the Web worked, for the most part.  

But when Starbucks unveiled a dedicated app just for its stored-value card (separate from the main Starbucks brand app), I realized that I wasn’t thinking big enough.

For example, in August PNC Bank become the first U.S. financial institution to offer multiple apps when it released an app for its Gen-Y-focused Virtual Wallet. That was followed last week by Wells Fargo when it unveiled its cash-management app for larger businesses, CEO Mobile (screenshot below; press release).


image Now, I believe that each major bank will roll out dozens of apps, perhaps hundreds, to support their business lines, major products and large segments. There will be an app for each major affinity credit/debit card, one for students, one for small businesses, one for large business, one for senior checking, one for home equity lines, and so on.

And, if that’s not enough, there could be a dedicated app for each stock broker, loan officer and mortgage broker. There could be one app for every branch, neighborhood, or region. Right now the search-and-discovery tools at Apple would implode under the weight of all these apps. But they’ll figure that out. It’s worth billions to them. 

Today, more than 100,000 apps are available for the iPhone. But fewer than 20 are for U.S. financial institutions. It’s conceivable that in the banking vertical itself, well over 10,000 apps could be developed, possibly many tens of thousands (see notes 1, 2). 

Wells Fargo is first U.S. bank with a cash management iPhone app (12 Nov 2009)

image          image

1. They won’t all be iPhone apps. The mobile market is too big to have it all consolidated at one player. 
2. It’s also conceivable that we’ll move away from the dedicated app framework, and users will be able to configure their phones with hundreds of info feeds without needing to install an app for each one. More like the iGoogle portal model.  It will be fascinating to see how it plays out.

Notes from the Mobile Commerce Summit (day 2)

image Day two of the Mobile Commerce Summit ran just for the morning (see Day 1 highlights), but anyone who overslept missed the highlight of the conference: the much-too-short panel discussion on revenue opportunities that started at 8:15 AM and ended at 9:00 (note 1). 

Panel: Mobile revenue opportunities 

  • Drew Sievers, founder & CEO, mFoundry
  • Joe Salesky, chairman & chief strategy officer, ClairMail
  • Cameron Franks, director, Mobile Commerce Americas, Sybase 365
  • Jayatsu Bhattacharya, SVP business development, Mobile Money Ventures (Citigroup & SK Telecom joint venture)
  • Mustafa Patni, former director of mobile banking, WaMu

Observations from the panel:

  • POS payment services: NFC at point of sale
  • Value-added services
  • Fees for mobile banking services: transaction, monthly, or annual
  • Premium accounts with a rich mobile feature set
  • Stock/investment trading (Citi Hong Kong is able to charge a premium for mobile trading)
  • Bill pay: expedited payments
  • Person-to-person (P2P) payments
  • Much of the revenues will be indirect, from deepening and improving customer relationship
  • Remote deposit capture for businesses
  • Merchant advertising: offers to customers as they shop
  • Loyalty programs: driving customers to certain merchants with alerts, offers, and discounts
  • Lots of cost-saving opportunities: self-service customer service, moving bill payments to on-us transactions, loyalty program management, security, fulfillment, marketing, call deflection

Panel: Smartphone impact on the customer experience 

Armin Ajami, VP retail Mobile channel, Wells Fargo

  • Almost half of smartphone users use the mobile Web daily (source: ABI research, Feb. 2009)
  • 18% of U.S. consumers have smartphones
  • 263,000 apps now available for smartphones, predicted to grow to about 700,000 by 2013
  • There are 27 different app stores today
  • Mobile-optimized website <> launched in July 2007, text banking launched Oct. 2007, native iPhone app launched May 2009
  • Funds transfer on mobile-optimized websites takes 2 minutes with 5 clicks, no zooming or scrolling vs. 10 minutes via iPhone mobile browser with 7 clicks, 5 zooms, 7 scrolls and 10 minutes

Alain DeSouza, sr. mgr., market development solutions marketing, Research in Motion

  • Globally, 12% to 14% of mobile phones sold now are smartphones; in North America, it’s now above 20% (22% to 26%)
  • Blackberry app store officially launched April 1, 2009
  • Not excited about putting NFC chips into handsets (adds cost); will do it when it makes business sense (last year it was a top-5 opportunity, this year more of a top-20)
  • P2P transfer is not a killer app, but could be important for adoption
  • Be careful not to waste bandwidth in your app development

1. Note to conference organizers: Never start a session at 8:15 AM after a Thursday night in Las Vegas.

Notes from the Mobile Commerce Summit (Day 1)

image About 100+ folks gathered in the brand new M Resort near Las Vegas for the third annual Mobile Commerce Summit by SourceMedia. Jeff Dennes from USAA and Jim Simpson from City Bank of Texas, both provided an extraordinary amount of metrics on their mobile rollouts (details below).

The biggest innovation of the day was iPhone-enabled remote check-deposit capture soon to be available from USAA (official launch June 25; see picture below). 

imageSession highlights
Jeff Dennes, executive director, mobile money & movement, USAA:

  • 7.9 million logins so far this year vs. about 7 million in all of 2008
  • Highest week to date, 476,000
  • 4.8 million USAA members own mobile; 1.5 mil use it to access Internet
  • 20% say mobile is primary channel
  • 11.4% of members using USAA mobile
  • Why so much usage: no branches, members trust USAA, extremely mobile military-oriented customer base, more technically capable than average
  • Have SMS, Firethorn downloadable app, WAP <>, native iPhone app
  • Native iPhone app released 2 weeks ago: Went to number 1 in first week with 55,000 downloads; 45,000 logins in first week, 93,000 in second week
  • iPhone app built in-house and has patents filed
  • Will be launching first iPhone remote deposit-capture app on June 25 (see photo above); tune in to the bank’s webcast at 7 PM Central time at <>
  • Current iPhone app has insurance functions: filing a claim, roadside assistance
  • Personal financial management functions coming soon
  • With mobile rollout, are seeing call volumes going down
  • 35% of access to mobile site comes from iPhone, 35% from Blackberry
  • Will be building app for Blackberry; others as demand warrants (e.g., Pre)

Jim Simpson, VP IT, City Bank of Texas

  • Mobile banking is powered by ClairMail (use Jack Henry for core processing and online banking)
  • Launched 17 Oct 2008 with balance, history, funds transfers, “call me,” near-real-time alerts (not batch) including reward-checking status/summary (sent out 7 days before end of checking cycle telling users how they stand on meeting necessary activity levels
  • Have microsite:
  • Made a major cross-channel marketing effort at launch: TV, print, radio, in-branch, and so on; used it to differentiate themselves in competitive Lubbock market
  • 10.2% online banking penetration
  • 64% use weekly
  • Average age is 32
  • Average account balance on primary account is over $5,000
  • More than 3,000 active users
  • Limited use of mobile browser site,; text-message banking is much more popular (also have; get 5,000 balance requests via text messaging each week vs. 25 or 30 mobile Web logins
  • Real-time alerts (vs. batch) is one of the key benefits that users like; they often can text message a confirmation of the transaction while still standing at the checkout counter; not always that fast, sometimes can be a few minutes later
  • Coming: End-of-day, text-based account summary, “payit” loan payment via text (in response to text alert), iPhone/Blackberry apps
  • How to make money? Adding ad-supported links within text messages; e.g., link back to the restaurant where the transaction originated

Ginger Schmeltzer, SVP, SunTrust

  • Currently at 2.5% penetration of online banking users powered by Firethorn
  • 33% access via iPhone; 33% via Blackberry
  • Have an RFP out now to find vendor(s) to increase functionality
  • See real benefits from using mobile channel to decrease fraud

Patrick Reetz, VP & director, online banking, M&I Bank

  • Rolled out mobile in Oct 2008 powered by MShift
  • Within 11 days, achieved one-year goal of 2% penetration of online banking users (longer term, their initial goal was 10% by YE 2010)
  • Currently have 7% penetration

Ellen Johnson, SVP retail online services, Huntington Bank

  • Have just under 25,000 users of mobile Web banking, launched in June 2008
  • Number of users of text banking surpassed mobile Web in April, launched 6 months ago
  • Mobile banking customers are 38% more profitable; text banking, 13% more profitable
  • Call center contacts per active user dropped 3.4% in first 6 months
  • Have a mobile microsite for marketing

Juli Anne Callis, president & CEO, National Institutes of Health Federal Credit Union (previously at Keypoint Credit Union)

  • At Keypoint Credit Union, even usage between iPhone and Blackberry access
  • Keypoint powered by mShift and will be using mShift at her new CU
  • Launched on Facebook Nov 2007 (OBR Best of Web winner)

Amy Johnson, channel manager — CEO Mobile, Wells Fargo

  • Launched 2 years ago (April 2007), and Wells Fargo remains the only major U.S. bank offering full corporate mobile banking
  • Mobile Web-based system
  • No charge except certain text messages (and those fees may go away)
  • No set-up process
     just log in at mobile site with existing online credentials
  • Will not disclose usage, but are targeting top-tier customers: top 10%-15%
  • Access: 30% iPhone, 50%+ BlackBerry
     no Android so far
  • $2.5 billion in wire approvals via CEO Mobile in 2008

Kevin Morrisson, AVP card products, H&R Block

  • Using text messages to defer calls to call center (currently receive 80 million annually), especially people checking to see if their refund has arrived.
  • Program was piloted this year and is expected to roll out nationwide later this year. Found dramatic decline in voice calls from test group.
  • Mobile program powered by Metavante/Monitise joint program. 

Rebecca Mann, director of strategic alliances, Western Union

  • Using mobile to replace either the sending or receiving part of a money transfer
  • Partnering with US Bank for international remittances

Lisa Stanton, CEO, Monitise America

  • Can do more secure services within an app compared to mobile Web or SMS

Matt Krogstad, VP business development, M-Com

  • Critical for banks to be point of registration and source of funds
  • Should be able to register outside online banking
     via call center, ATM along with mobile phone
  • In Australia, mobile money transfers was slower to take off, approx. 18 months after adoption of mobile banking

Clint Heyworth, attorney, consumer finance group, Chambliss, Bahner & Stophel

  • One-to-one relationship with phone (e.g., you have it with you) makes it better for security compared to PC where others have access
  • Not a lot of legal differences between delivering banking services via mobile vs. online
  • Don’t expect to see specific regulation regarding the mobile channel; will likely be the same regulations as for online banking

Tom Wills, senior analyst, Javelin Strategy & Research

  • Security is single biggest factor inhibiting mass consumer uptake
  • Only 500 pieces of malware have been identified so far in mobile vs. thousands of new ones every day online
  • 47% of respondents are uncomfortable with mobile security (Mar 2008 data)
  • Main concern is hackers, mentioned by 73% of those above
  • Expects anti-virus software makers to build mobile versions

Rebecca Sausner, editor, Bank Technology News

  • Total revenues for mobile banking vendors this year will be $26 million (source: Aite)

Sean Moshir, CEO, CellTrust (also mobile banking sub-committee co-chair of Mobile Marketing Association)

  • 66% of consumers still not yet comfortable using mobile device for financial transactions (source: 2009 KPMG Global Consumer Survey)
  • 7% said they would pay a nominal fee to access online banking services via mobile phones (source: 2009 KPMG Global Consumer Survey)

ING’s Ultra-ATM Finder Android App Uses Augmented Reality (AR)

image While working my way through the RSS backlog tonight,
I found a post from Rob Findley at The Bank Channel, I wish I’d seen a week ago. It would have made a nice example in our latest Online Banking Report on the iPhone and other mobile applications

image Last month, Dutch giant ING released a Google Android mobile application called ING Wegwijzer (see translated page below), that goes one step beyond the iPhone’s GPS-enabled ATM finder apps.

In the ING (Netherlands) version, you have three choices of how to view the nearest ATMs (see below):

  • List
  • Map (regular or satellite)
  • Camera

The camera option is very cutting edge. Users point the camera in their G1 mobile phone camera (inset) and the app overlays a pointer to the nearest ATM (see below). The application works for all ATMs, ING-owned and others, but only in The Netherlands. 

The application was developed for ING by SprxMobile using technology from Australia’s Austria’s Mobilizy.

I saw a Japanese startup demonstrate a broader mobile shopping app at TechCrunch50 last September, the Sekai camera from Tonchidot, but this is the first production app I’ve seen using the technology.

Bottom line: This is probably overkill in terms of a mobile ATM finder. However, it shows the power and versatility that’s rapidly being engineered into mobile phones.   

ATM location as pointed out by ING app running in camera viewfinder


ATM locations also displayed via typical mapping

image       image

ING landing page for the Wegwijzer (link) (Google translation, 18 March 2009)


UK’s MoBank Could be the First of a New Wave of Banking & Payments Companies Optimized for Mobile Delivery

imageMoBank, the U.K.-based mobile banking and payments said to be launching this month, is creating some buzz on the other side of the Atlantic (stories here, here, and here).  Given the pedigree of its two founders, Steve Townsend and Dominic Keen, who blazed many online banking trails at Egg and First Direct, it should provide a glimpse of the future of mobile finance.

The company is establishing a call center on the Isle of Man, run by Steph Gregg, a veteran of Egg, First Direct and Vodafone. Melanie Hunter is head of marketing, and David Rubin is head of mcommerce.

The company was named to Red Herring’s top-100 global start-up list last month (here) along with FinovateStartup alum ClairMail (demo video here).

It appears at launch the service will support bill payment and certain mcommerce activities, such as purchasing movie tickets. An iPhone app is expected at launch. Users will register their credit/debit card(s) with the service. The company plans to expand into mobile banking and money-management activities in the future. 

The company has raised more than $1 million according to news reports. The company was founded in 2006 and presented at The Essential Web conference in June 2007
(p. 43, here) and had four employees at that time.

Here’s how the company described itself 18 months ago:

MoBank is creating the world’s first mobile-led online bank. The company believes that, for some sections of the population, small screen devices will become the channel of choice for most banking and payment services. moBank’s business model is based on providing a free-to-use basic banking service with paid-for add-on features. Furthermore, moBank’s users are enabled to participate in a range of unique, value-generating m-retail activities.

What’s innovative: It sounds like a mobile-based account aggregation and bill-pay service, similar to Mint on the iPhone. But it could also contract directly with one or more banks like SmartyPig has (previous coverage). But as ING Direct proved, optimizing on a new delivery channel can pay off with great word of mouth and positive press.

MoBank pre-launch homepage (6 Feb. 2009)


Note: For more info on the growing market, see our Online Banking Report on Mobile Banking.