Another conversation

I was talking to someone about Finnovate 2007 and they looked down the list of comnpanies presenting and had this to say:

Mobile banking vendors - cashflow is still king

The recent demise of ex-mobile banking leaders Meridea (out of Finland and previously using the now-vacant URL - www.meridea.com) brings to light some interesting considerations for those making technology decisions about their mobile banking and payment platforms.

Let's look at a couple facts... European sweethearts Monetise lost c$15m last year, and God knows how big the losses were for mFoundry, Firethorn and Clairmail all of whom have been raising tens of millions of dollars from investors (NOT CUSTOMERS!). On the other hand, existing online banking vendors (such as Yodlee) are funding developments from their existing cashflows as are smaller and more nimble players like mShift and M-Com.

And if these heavily-backed guys are losing money so heavily, where is it going to come from in the future? The answer is obvious - they will have to recover it from their existing customers through heavier fees in the future or they will have to get plenty more customers on board in the short term. This kind of scenario is symptomatic of the pressures brought about by the Venture Capital industry, rather than specific to the mobile commerce industry. Venture capitalists are impatient and explicitly interested in 10 times the return on their investment - fiscal prudence and sustainability does not align with their model. Their message to these niche mobile banking players they have invested in is simple; scale fast and charge lots or go bust!

The moral of the story is that big banks and mobile carriers making a technology investment should be very wary venture-backed mobile commerce providers. Who knows what financial pressures they are under and how long they will be around....

See http://africa.reuters.com/instrument/gan.php?i=25204675 for more details of Meridea's fall from grace.

Finnovate 2007

One of the problems of living in New Zealand (note to the geographically challenged: Find the Pacific Ocean, find the big blob bottom left, we're the two islands to the right of the big blob), is that we're far, far away from the rest of the 'civilised' world. That means that we miss out on things like Finnovate 2007.

PayPal Mobile to enter Oz

Charis over at The Better Banking Review reports that PayPal mobile is going to enter the Australian market. With the slow rollout of Google Checkout internationally, I'm hoping that PayPal mobile gets into Australia soon, and then here in New Zealand.

Local Boys Make Good Part 2

I'm not sure what the guys over at MCom have been doing (see my last post), but people are starting to take notice. Good to see a Kiwi company doing so well in this space.

Local Boys Make Good

Local mobile banking company MCom is currently being feted by
Mobile Money & Banking.
I must admit that I was surprised how much of the local mobile banking market they have. One aspect of serving, say, the US market from NZ that isn't discussed is the possiblity to work on changes overnight (US time), so that the US client requests changes last thing on Tuesday and Wednesday morning the changes are waiting for them to approve.
[Disclosure: MCom is one of the companies on my watch list and I'm also in NZ]

How did they think they'd get away with it?

I recently posted about GPay, Google's entry into the text payment market, and made the comment on Rob Findlay's original posting concerning the need for a patent to be for something new and original. Dave Birch agrees, raising the question for me of: How did Google think they couild be granted a patent in this area when it is immediately obvious to everybody that Prior Art exists?

PayPal, Google Checkout and now... Amazon?

I'm probably a bit behind the times, but Amazon joins the fray!
http://paymentswatch.com/2007/08/07/amazon-flexible-payment-service/#more-49

https://payments.amazon.com/sdui/sdui/index.htm

GPay vs. ????

My recent post about the Google Checkout vs. PayPal figures in the context of the possible success of GPay (mobile payments solution) ignores one very important distinction: GPay does not have a PayPal to compete with. There is no gigantic behemoth with years of experience in freezing people's accounts without warning payment processing experience with which to do battle. There are, however, many companies beavering away providing similar services to a greater or lesser degree. So will that mean that GPay enjoys a swift rise to market domination while Google Checkout suffers a long slog to parity with PayPal?

Google Checkout vs. PayPal

OK not market share of PayPal vs. Google Checkout, but here is some data on traffic figures. This from November last year.

Better is this piece claiming 1% for Google (April 2007). JPMorgan reported in January 2007 that Google had 6% market share

Lastly this report from July 2007 indicates that its har (impossible) to take on an entrenched competitor. Don Quixote tilting at windmills, or the first steps in bringing down the giant?

Outsource IT Infrastructure

James Gardener has an interesting piece on the outsourcing of IT infrastructure in banks. Thought provoking stuff to be sure, and it seems that this coupled with recent events (P2P Lending in NZ & GPay) means that (should those technologies take off), the banking sector is under a fair bit of pressure from substitutable products. Will these disruptive technologies achieve the only thing differentiating the banking industry from their competition: The trust of the public?

Had to happen: GPay

Hat tip to Rob Findlay for mentioning Google's entry into the mobile payments arena. I hope they buy the www.gpay.com domain soon - the guy's spelling offends me!

So what does a behemoth like Google getting into mobile payments mean? Well to tell you the truth I'm not sure: what impact have they had on online commerce with Google Checkout? Have they taken market share away from PayPal? I'll have a look around and see if I can come up with something...

P2P Lending coming to NZ

Charis over at the Banking Review points out that Peer to Peer loans are on their way to New Zealand. What is Peer to Peer Lending? Normally when you have a couple of thousand dollars looking for an investment opportunity, New Zealanders either buy shares (if they weren't burnt by the 87 crash) or put some money in a finance company (if they were burnt by the 87 crash). With the recent collapse of finance companies in New Zealand, there will be more money looking for investment vehicles. So enter P2P Lending. P2P Lending is when people with money to invest look for people with lending requirements. So if I need a new car instead of lending from a bank, I go to a website and get matched with someone with some money looking for an investment.
The timing couldn't be better, it just remains to be seen whether the finance company collapses have made people too risk adverse for this to fly.