PG&E’s Convenient Mobile Bill Payment App

image Skimming my news feeds in the post-Finovate logjam, I flagged a news release about a new app that just landed in the Android Market (the iPhone version rolled out last December). The app allows Californians to easily pay their PG&E power bills from their mobile phone using a credit/debit card or checking/savings account. It’s powered by Tio Networks

And while you’d think that three years into mobile app era, there’d be hundreds, if not thousands of similar apps, a quick search of the Apple App Store came up empty (see note 1). 

The app is drop-dead simple to use, as it should be (see screenshots below). The amount owed (across multiple PG&E accounts if necessary) is shown. Then, users select payment method, "sign" the screen with their finger, and submit. An email confirms the transaction.

TIO levies a $1.45 transaction fee per payment (well disclosed, see second screenshot below), which is a buck more than a stamp, but it also gives customers the option of paying by card, something that can’t be done in the mail, online or in person. And payments received by 5pm are posted the same day, an important benefit for the large segment of the population that prefers to pay bills at the last minute.

Summary: Company specific same-day billpay apps are a great convenience for the majority of customers who pay their bill upon receipt (rather than relying on automated options). We expect to see many more like this. FIs and payment processors that serve billers would be wise to help them mobilize their payments.


PG&E mobile billpay screenshots (iPhone version)

image  image  image

image    image


1. There are likely at least a few others that I didn’t find. The app search tools are not super sophisticated.
2. As of 7 July 2011, there are more than 425,000 available apps and more than 15 billion cumulative downloads.

MoveNbank: Can it Out-simplify BankSimple?

image I’ve been accused of falling for the Bank Simple hype. Just to prove that I don’t discriminate, I bring you MoveNBank, a mobile-optimized banking startup founded by Bank 2.0 author and consultant Brett King.

From what little is disclosed on its Facebook page, Twitter feed and Startuply profile I’ve assembled the following facts:


  • Founded July 2010
  • Private beta to begin soon (per 1 July 2011 Tweet)
  • Soft launch scheduled for July 2012


  • Global startup with HQ in NYC (Madison Square Park, 25 W. 31st)
  • Founder and Chairman is Brett King
  • 8 employees

Product description:

  • Mobile only, with no paper or plastic
  • NFC-enabled app
  • Incorporates “gamification” in UX
  • According to Startuply, “reinventing credit scores and more with an open, social transparent, and viral model” (sounds P2P lending-esque)

Bottom line: MoveNbank is looking to leapfrog the competition by removing all vestiges of old-school banking. No branches (of course). No paper (no surprise). And no plastic (what?).

That’s how ING Direct got its start (they did have paper statements), so it’s not unprecedented. But if MoveNbank plans on offering payments, it will be harder to pull off. But with a soft-launch still a year away, it should be able to ride the NFC wave expected to roll across the globe in the next five years.

Are there any other remote banking startups I’m missing? Drop me an email (


MoveNbank placeholder page (11 July 2011)


Op Ed: Thoughts on Google Wallet

This guest post was written by Daniel Thomas, a 25-year strategy and product development veteran of the financial services industry. He is a principal consultant with Mindful Insights LLC.

image Google’s announcement two weeks ago certainly raised a few eyebrows in the mobile payments arena and took a giant leap toward putting to rest the debate about the use of NFC.

However, there’s an interesting twist that hasn’t been explored in the many articles written in the aftermath of the announcement. How will Google’s effort impact revenues from the merchant-funded rewards programs (see note 1) banks hope will increase loyalty while softening the blow of the now-certain Durbin Amendment losses?

Citibank inside google wallet

But has Google just killed banks’ dreams of grabbing a share of the online advertising pie ?

Merchants today are offering higher discounts and rebates to bankcard users because the banks, via various rewards vendors, are letting merchants in on their customers’ spending history.  That data obviously has a lot of value and the merchants compensate the banks for it in the form of commissions on purchases made by the bank’s customers after targeted offers have been presented.  On the surface, one might think that regardless of the mobile wallet used, Google’s or otherwise, so long as the payment is made from a bank-issued product, the bank will still own the spending history data and be able to trade it for a commission.

However, Google, or whoever owns the mobile wallet (but especially Google), will be able to “see” the purchases as they take place and can begin recording its own spending history data.  That, coupled with other non-mobile spend-history gleaned from browsing on the web across multiple cards per individual or household, potentially gives Google a leg up on the richness of its data (assuming Google can tie the two together, is there any doubt?).  Combine that with general browsing history and Google has a pretty good profile of each person to offer up to merchants. 

Privacy issues aside, this seems to trump bank spending history data placing Google in a much better position to bargain with merchants and ad networks. But privacy issues may well loom large over all of this once consumers and Congress put 2 and 2 together and figure out what Big Broth… er, that is, Google is up to.

Meanwhile, not everyone will have an Android phone nor a Google Wallet. Plenty of other mobile wallets will soon hit the scene, but even so it will take a long time for mobile wallets to replace plastic (amusing thought– which will go away first: plastic or the perpetual paper check?) so merchants will still want to keep banks in the equation by compensating them for allowing them to use their spending history to develop targeted offers.

So, merchants are going to need to decide: should they allow Google to make the reward offer or the banks?  Surely, they won’t compensate both for bringing in the same purchase. That leaves the decision in the hands of the consumers. Do they want to receive points and cash back from Google or from their bank? 

Undoubtedly, consumers will decide based on which one offers the greatest value for the least amount of work. Online usability has been a trademark of Google, banks not so much.


Citibank and MasterCard are key banking partners
On its website, Google asks prospective visitors if they have a Citibank MasterCard

Citibank and MasterCard are key banking partner


Note: For more information, see Online Banking Report: Merchant-Funded Rewards (published  Feb. 2011)

Zong: A Payments Company Name to Remember

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.


imageAdmittedly, my online game prowess is more closely aligned with Pong and Donkey Kong than the latest complex and socially intricate diversions. Back in the day, computer games garnered only a single payment transaction: when it was actually purchased. But today, in order to reach the next level, buy virtual pets or beat your opponent a half a world away, a player/avatar/consumer will typically transact multiple times per month in order to buy Facebook credits or other virtual currency (cash, coins, gems, etc.).

These transactions can often occur in the heat of battle (literally), and the last thing any good soldier wants to do is stop progress in order to begin the seemingly weeklong process of taking out their credit card and typing a bunch of numbers just to spend a $2.99 to re-fill their weapons cache.

imageBefore you could say billabong, along came Zong to make it as quick and as easy as a song. How? They ask if you want the charge to tag along on your mobile phone bill. And before long, you are back in action and that much stronger.

So, what’s the big deal? What has tickled my lifelong fascination with payments is not where Zong is now but where they are headed. Keep in mind that all these newfound payment transactions are seen only by the game company (merchant);, Zong (acquirer and network); and the mobile phone company (issuer). Financial institutions are involved only when the phone bill is paid at the end of the month.

Furthermore, the fees that Zong and a throng of other “carrier billing” processors command can be as high as 40% of the transaction amount. Ding-dong! Hello? After all, the cost of goods sold for a new virtual tank is pretty small and so is the actual transaction amount once the price has been converted from the game company’s internal currency.

But even so, 40% ain’t chicken singsong, especially when you consider that the online gaming (not gambling) market today is along the lines of $100 billion. Admittedly, 90% of that market belongs to the non-virtual console and PC games that Zong will be moving into as those products enter headlong into the virtual world.

Future plans
Zong, which now has 100 employees, is already available as a form of payment for Facebook Credits and virtual goods in 42 countries. The company has big plans to expand with its model. Online gaming is just phase one of its multi-prong strategy. Zong knows that moving into markets where physical and digital goods are purchased online (phase 2) will require a reduction in the processing fee percentage. But they already have millions of loyal consumers enrolled in their service which they can leverage to expand to merchants selling relatively low-priced products with reasonable margins (think: books, music, etc.)

Phase three takes things one step further as Zong’s strategy intersects with mobile payments at the physical point-of-sale. The idea is that consumers will use the Internet to research their next purchase, as they do today, and will buy the item online using Zong to place the charge on their mobile phone bill. That payment information is then stored in the cloud so that their customers can go to the physical store, pick up the item and show proof of purchase to the merchant.

That should keep traditional payment providers awake all summer long.


Purchasing Facebook credits with Zong

Step 1: Choose number of credits

Step 1: Using Zong to purchase Facebook credits

Step 2: Enter mobile number

Step 2: Using Zong to purchase Facebook credits












Step 3: Random 4-digit authorization PIN is sent via Text message

Text message from Zong authorize purchase Facebook credits

Step 4: The PIN is entered into Facebook

Step 4: Using Zong to purchase Facebook credits

Final confirmation screen

Final confirmation when using Zong to purchase Facebook credits

ING Direct Adds Phone-to-Phone Mobile Payments Powered by Bump Technologies

imageI’ve always admired ING Direct’s focus on deposit accounts primarily sold and serviced through the Internet. While the bank has diversified into checking accounts, mortgages, and investments during the ten years since it launched, the core website look and feel is virtually unchanged (see 2001 version here). 

So I was more than a bit surprised to learn this weekend that ING Direct became the second U.S. financial institution to add Bump-powered phone-to-phone payments to its iPhone app. PayPal was first, adding the feature more than a year ago.

Bottom line: Evidently, with “high-yield savings” stuck at 1%, the giant direct bank needs to be a little more creative on the feature side to attract new business. While bump-to-pay will eventually be replaced with direct communications via NFC or other technologies, it’s a nice addition that positions ING Direct as a mobile leader.

Bump is now one of two choice on the P2P menu on ING Direct’s iPhone app (2 May 2011)

Bump is now one of two choice on the P2P menu on ING Direct's iPhone app (2 May 2011)      Bump is now one of two choice on the P2P menu on ING Direct's iPhone app (2 May 2011) 

Bump is now one of two choice on the P2P menu on ING Direct's iPhone app (2 May 2011) 


Note: For more info on mobile banking, see our previous Online Banking Reports.

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

The 12 Days of Mobile Banking

image In the holiday spirit, I thought I’d lay out the perfect mobile banking/payments app for 2011 (note 1). These are the features I hope to be using on my smartphone at this time next year: 


  • Option to log in with 4-digit PIN only
  • Authorize unusual and/or declined card transactions and unusual checks presented for payment

Bank account management

  • Banking data presented in order of importance with new transactions in bold (like Gmail Priority Inbox, previous post)
  • Quick view of current balance with predicted balance going forward based on known upcoming transactions

Paper management

  • Deposit paper checks via camera (remote deposit)
  • Pay bills by taking a picture of the billing statement (photo bill pay)
  • Scan-and-store paper receipts and statements


  • Use NFC or bar-codes at the point of sale to make payments directly via phone, without the plastic
  • Pay bills or individuals via their mobile phone number

Alerts & calculators

  • Receive important alerts via push messages to the phone’s main screen
  • Take action or adjust alert sensitivity by responding to messages via text messaging or within the app
  • Key financial calculators, such as loan/mortgage payments

And a partridge in a pear tree.

Enjoy the real thing here:


1. I’m missing important features, but I had to stop at 12 to fit the holiday theme. Thanks for bearing with me.  
2. For more info on mobile banking, see our previous Online Banking Reports.
3. Photo credit: Apple holiday promotion in United Kingdom <>

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:

Why Mitek’s New Photo Bill Pay Could be a Way Bigger Deal than Mobile Deposit

imageFor the second time in three years, Mitek completely wowed me on the floor at BAI Retail Delivery. In 2008, I was amazed to see them deposit a check with their mobile phone; this year, the trick was similar, but with a bill.

Mitek CEO James DeBello demonstrated the new systam to me at their booth (press release). He grabbed a bill from a pile, took its picture via the Mitek iPhone app, and sent it off via 3G connection to servers which read the characters through OCR and queued it up for payment. The billing and payment-due info was presented in an easy-to-read table for the user to verify before hitting the “pay” button (see screenshots below). I coveted it for my checking account … now. 

While the deposit of a paper check has a little more of a “wow” factor (as in wow, I don’t have to go to the branch anymore), the mobile scan-and-pay of a bill is actually far more useful. The potential market for mobile deposit-capture is limited by the shrinking number of personal checks in use, especially by iPhone-wielding early adopters. I’d guess the total U.S. market for mobile deposit is no more than 10 to 15 million households and shrinking.

And even though paper bills will eventually be eliminated by Doxo or someone, they are still a fact of life for just about everyone with a checking account. And even if consumers start accepting ebills from their major payees, most will still have a few paper bills every month for at least another decade or two.

So not only is the market for photo bill-pay about 10x that of mobile deposit, but the service also solves a peskier problem for most end-users: getting bills paid on time, something that has far more financial consequences than processing the occasional paper check gathering dust in the drawer. 

And for financial institutions, photo bill pay provides several important benefits:

  • Helps get customers started with online bill pay by eliminating the data-entry task of setting up new billers
  • Helps convert customers from other bill pay providers by eliminating much of the conversion hassle of re-establishing payees at a new bill pay service
  • Provides a tangible, value-added mobile service to differentiate from the competition
  • Provides a fee-revenue opportunity from either monthly subscriber fees and/or expedited payment fees

The downsides:

  • Cost
  • Tech support/customer service
  • Potentially harder to wean customers off the paper bill, if it’s so convenient to just point-and-shoot to get it paid

Bottom line: Without knowing costs, what type of back-office integration hurdles the app faces, or even personally testing the user experience, I can’t say for sure how popular it becomes. If the scanning is finicky, it could be a non-starter. But, if it works like it did in the demo, Mitek may have figured out how to finally eliminate the data entry from the electronic bill payment process, a HUGE win.

1. Main screen                               2. Scan with mobile camera

image     Mitek photo billpay camera view

3. Verify data (3 screens)

 Mitek photo bill pay verify data    Mitek photo bill pay verify data    Mitek photo bill pay verify data

Note: For more info on mobile banking, see our mobile banking series in Online Banking Report.

Is Barcode Scanning the Next Must-Have Feature for Mobile Banking/Payments?

imageBarcode scanning via mobile phone has been around for a a while. But until added it to its mobile app this week, I hadn’t experienced it firsthand. Target’s iPhone app also supports barcode scanning, powered by RedLaser.

And it’s impressive. Unlike mobile remote check deposit, where the trial-and-error method of getting a good picture can be tedious, barcode scanning provides real-time feedback so you know exactly when the camera is positioned for a successful scan (see screenshots of the process below).

Yes, it took a minute or so to get my first scan to work, but the built-in feedback mechanism makes it feel more like a game that I eventually won, not a frustrating task. But don’t take my word, it’s something you should try yourself via the Amazon Mobile or RedLaser app (see inset).

Relevance: Robust payment capabilities are the reason we believe mobile banking eventually eclipses online banking in importance. Whether it’s location-based fraud monitoring, mobile wallets, or contactless payments, mobile phones have so many advantages that users will naturally gravitate to them to manage their spending/banking.

Barcode scanning, or the even cooler picture-recognition (also supported by Amazon, see screenshot #5), are important shopping value-adds that many mobile users will use. However, it seems to be more of a feature than a standalone app. And where’s the most logical place to locate that feature? Integrated directly into bank debit and/or credit card apps. Mobile App barcode scanning screenshots (13 Oct. 2010)

1. Barcode-scan option within search                 2. Position UPC within orange bars

image           image

3. Orange bars turn green when                   4. Actual results from my scan of
the barcode is properly aligned                     a DVD lying around our house

image           image

5. Even faster, at least for media titles, is the photo-recognition feature offered by Amazon. Within seconds after snapping the photograph, Amazon had it identified and stored for future reference.


Note: For more info on mobile banking, see our mobile banking series in Online Banking Report.