Comments Regarding American Banker’s Article On Mobile Money for Banks
We want to share with you a letter that we have posted to the American Banker site in response to their article on our new offering Mobile Money for Banks which we announced yesterday. We also welcome your comments on this.
Daniel,
I read your American Banker article yesterday concerning our mobile money announcement with some surprise, and I thought it might be helpful to clarify a few important points.
Naturally, analysts differ in their opinion about the maturity of the mobile money market. We received very positive feedback from many analysts and bankers as we discussed our plans, and the extensive speculation in the article about Obopay’s timing misses the point of how transformative and different mobile money is from many existing categories.
The title of your article incorrectly says that Obopay is in the “bank transfer segment”. When I think of the “bank transfer segment”, I think of legacy ACH and billpay vendors which are already used by thousands of banks across the U.S. In contrast, “Mobile Money” is focused on helping banks solve a separate set of issues:
- Providing the millions of mobile, cash-based merchants in the U.S. with a solution for accepting card and ACH payments directly into their DDA.
- Enabling consumers to send money to anyone – instantly.
- Rapidly deploying services in a way which reinforces the bank’s brand – to include brandable services via web, SMS, and WAP, as well as smartphones like the Blackberry and iPhone.
Concerning the speculation in the article that Obopay may be “too late” to this market, when we look across the landscape of U.S. financial institutions, what is remarkable is how few of them offer the services I describe above. What is further interesting is the extent to which the carriers and other non-bank competitors are positioning themselves to offer services like this. When millions of Americans recently used their phones to send money for Haitian relief efforts, they did so with zero involvement from the banks. By and large, banks now recognize that they quickly need to enter the market and many have targeted mobile payments as a key area of investment this year. Mobile Money is the most important innovation in banking in 30 years.
Bob Hedges, Managing Partner of Mercatus (yes, an analyst) said it best: “Any bank that isn’t looking at how to enter the mobile money market as quickly as possible is risking the loss of business to competitors, the carriers, or PayPal. Given the considerable level of consumer interest, what banks need is a solution that is easy to implement, inexpensive, and fast to deploy. We should anticipate a wave of bank deployments over the next six months.”
I was further surprised you would suggest that our focus on the bank market is some sort of new endeavor for our company. Our partnerships in recent years with both MasterCard and FIS are just two proof points which indicate that banks have been a key element of our strategy for some time.
Finally, in any company which is focused on changing the way the world moves money, there is a process of innovating, deploying, observing, learning, and applying those lessons in ways which benefits customers’ lives. Obopay has been doing that for 5 years, and throughout has remained laser-focused on mobile money and its growing importance around the world. I am very proud of what we have accomplished. We will let the analysts and writers in our industry argue about whether we are “too early” or “too late”, but we will continue to engage with those who are awake and aware of how the world is fundamentally changing.
I hope this response clears up misconceptions for your readers. We look forward to continuing the conversation with those who are as passionate about mobile money as we are.
Regards,
Michael Diamond
Senior Vice President
Obopay
1 comment May 12th, 2010
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