Tyfone: Plug-and-Play Mobile Banking

I have previously covered Monitise, a mobile banking and payments platform for banks that has been incredibly successful in tying up partnerships with UK and US banks, as well as partnering with Visa to deliver mobile payment solutions.

In a recent article, Pymnts covers Tyfone, a competing mobile banking a payments platform.  Tyfone was founded in 2004 in Portland, Oregon and is funded by Ojas Venture Partners, a Bangalore based early-stage tech fund.  They target banks and credit unions and initial traction appears to primarily be with credit unions.

In terms of product differentiation, Tyfone emphasize the folowing features:  

• Mobile banking for non-online bankers: enabling all bank customers, including those that are not currently signed up for internet banking to quickly sign up for mobile banking 
• Account aggregation: enabling the user to manage all their accounts from the same interface 
• Secure ID management: Multi Factor Authentication (MFA)  to ensure secure log-in 
• NFC Contactless Payments: a flexible mobile wallet

This is clearly a fast-growing market that will develop very quickly.  In my opinion the success of Tyfone will be less about the technical sophistication of their product and more about their ability to build a network of bank partners.  I.e. a player with 'good enough' technology and a broad customer network will have a great chance of success than a player with the most advanced technology, but a less developed partner network.

The market is definitely big enough for another couple of players, so it will be interesting to see if Tyfone will choose to focus their efforts on credit unions or if they will go with a broader approach to business development.

Mobile Banking: Who's Driving the Innovation?

According to a Forrester study, 12% of the US online population, or 10 million Americans, currently use online banking.  Usage has more than doubled since 2007 and is expected to reach 50 million people by 2015.

The numbers illustrate that mobile banking is still very much in its infancy.  Most banks offer only standard features, such as check balances, transfer funds and pay bills, and 37% of respondents say they don't see any value in mobile banking.

To move the needle, the industry must figure out how they use the features of mobility to make mobile banking a unique experience.  This could come from mobile payments, location-based offers and coupons, peer-to-peer transfers, etc.  However, there is a lot of value in delivering these services, and we see new companies enter the space on a daily basis - posing the question of what role banks will play.

Increasingly we see banks put the faith of their mobile banking solutions in the hands of specialist providers.  Monitise is the most prominent example and has shored up much of the UK market, is growing fast in North America and expanding in Asia and Africa.

Although Monitise and similar companies have developed impressive solutions, it is clear that  innovation in mobile banking is unlikely to come from the banks, which may be ceding control of this very important customer service channel.

3 Articles on Innovation in Payments

The Rise of the Hybrid Startup

In this article, Glenn Kelman, the CEO of Redfin, argues that 2011 will be the year of the Hybrid Startup.  Unlike the traditional clicks-and-mortar businesses, that simply add an online presence to its physical-world store, the hybrid business leverages the best of both the online and offline worlds to build entirely new business models. 

Hybrid businesses will enhance customers’ shopping experiences by integrating virtual elements, initially through mobile phones.  Examples are location-based offers, recommendations, augmented reality experiences and so forth. 

As hybrid business are already adding an online layer to the physical-world shopping experience, one would expect that they would take the payment online as well.   

http://techcrunch.com/2010/12/24/hybrid-startup/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29

Point of Sale Revolution: Transformation of Payment Acceptance

Point of Sale (POS) acceptance, a once sleepy, commoditised, add-on to the merchant acquiring business, is in the midst of a transformation, with several game-changing players entering the market.

There are three key drivers behind the innovation:

1.     Internet ubiquity at the point of transaction: virtually all merchants have transitioned from dial-up to always-on connections, facilitating an explosion of new capabilities that integrate traditional terminal functions with new loyalty, marketing, and information services

2.     Wireless proliferation: merchants are increasingly equipping the employees with sophisticated, mobile POS tools, such as the iPhone or iPad, which enables the merchant to fundamentally change the shopping experience

3.     Emergence of more sophisticated loyalty solutions: merchants constantly seek to develop more attractive loyalty and marketing programmes.  POS innovation is enabling them to integrate loyalty more seamlessly in the POS experience and to tailor offers more effectively by leverage the data they captured.

These drivers are significantly altering the POS space and making it one of the more innovative parts of the payments value chain.

http://www.thecatalystcode.com/theconversation/blog/2010/12/21/point-of-sale-revolution-transformation-of-payment-acceptance/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheCatalystCode+%28The+Catalyst+Code%29

Mobile Apps Wars’ Impact on the Payment Biz

In this article, David Evans points out that it is only just over two years since Steve Jobs open up the iPhone for external apps (October 2008).  There are now more than 100,000 apps for the iPhone and, for many customers, this has become an equally important reason to buy the phone as the phone itself.  Since then, Google Android has developed a successful app market of its own, while  Blackberry and others are also having a go.

A number of these apps are payment related.  Transactions and PlanetAuthorize have both developed apps that enable merchants to accept payments anywhere, while Yodlee and Monitise have developed online banking apps.  However, Evans argues that these are all relatively obvious innovations.

The key, he argues, “is that with all these developers, all around the world, thinking about apps, it is probable that someone — perhaps many someone's — will come up with a killer app that will revolutionize payments”.  “Those who believe in a linear path from mobile phone, to mobile phone plus NFC, to mobile phone as payment device at POS are likely to get a rude awakening”.

The payment industry could experience the type of groundbreaking innovation that the computer industry experienced after the launch of the PC or the mobile phone industry experienced after Apple opened up for external apps.

http://www.pymnts.com/mobile-app-wars-impact-on-the-payments-biz-2/

Monitise: Growth Through Partnerships

Earlier this month, Monitise, the UK-based mobile banking provider, announced that its European business has now reached month-to-month brake even.  In less than 10 years, Monitise has struck up partnerships with with most UK banks, including HSBC, Lloyds TSB, RBS and NatWest, signed up more than 3 million customers and is processing more than 10 million transactions per month. 

Key to Monitise’s success has been its flexible banking platform that allows it to work with all types of banks and carriers.  Moreover, it has a range of technical platforms that enable users to perform a range of banking services, such as check balances, view statements, pay bills and receive alerts, on mobile phones of all types, from SMS to iPhone apps.

However, what makes Monitise one of the most exciting companies in the mobile banking space is the partnerships it has struck up around the world.  Through these partnerships, Monitise is becoming the leading player globally and is entering the payments space. 

In 2009, Monitise announced a strategic alliance to develop mobile banking solutions for Visa, which would take a minority stake in Monitise.  This partnership has proven to be very powerful in positioning Monitise as an industry leader and facilitate global expansion.

In the US, Monitise partnered with FIS and entered as the first multi-bank, multi-carrier mobile banking platform.  The venture has proven successful and has now signed partner agreements with nearly 250 banks.

In Asia Pacific, Monitise announced a joint venture with First Eastern and will launch in Hong Kong as the first market.  Beyond Hong Kong, the Monitise has its sights on China, Japan, ASEAN and the Middle East.

Recently, Monitise has also announced launches in India and several African markets, such as Uganda and Nigeria.  In India, it will work with Visa and is interestingly integrating mass transport ticketing with its standard banking platform.

In addition to its geographic expansion, Monitise is also making very interesting moves in the payment space.  In February 2010, it announced that it would integrate Device Fidelity’s NFC capabilities in its global platform.

Furthermore, in November 2010, Monitise formed a join venture with Best Buy and Carphone Warehouse founder, Charles Dunstone, to develop an NFC network in the UK.  This network would initially leverage Monitise’s broad banking partnerships in the UK, Best Buy’s retail presence and Dunstone’s retail experience, to develop the network.

In December 2010, Monitise announced a partnership with ViVOtech, a leading near field communication (NFC) software developer, to deliver mobile phone payments services to banks across the United States.  With Monitise’s already broad base of bank partnerships, this deal could make it a major player in contactless payments when NFC enabled handsets are launched later this year.

In less than 10 years, Monitise has become a leading, global player in mobile banking and payments.  With its open mindset and platform, it has successfully forged powerful partnerships that have enabled it to build an emerging global presence and expand its product capabilities to contactless payments, mass transport ticketing and couponing.  Undoubtedly, Monitise will continue to strike up new partnerships and expand in new business areas, and is definitely “one to watch”.