Bill Barhydt is jet-lagged in an outdoor cafe when he uses his company's mobile-based checking account, Boom, to text a penny to a reporter.

The chief executive of m-Via, a Palo Alto, Calif. start-up, has spent the past four years developing a low-cost mobile payments system and telling people around the world about it. Boom, which launched in November, is so closely tied to a user's mobile phone that it uses the phone number as an account number.

Since Boom's launch, Barhydt has been traveling between Los Angeles, Mexico City and Miami promoting the technology. This week, he's in New York talking to visiting Mexican dignitaries and associations of Latin American immigrants.

Later this year, the company will launch an app for Google's Android mobile phone platform. That will allow Boom users more ways to access their funds. The company also plans to let users deposit checks by snapping their picture with a phone's camera.

Today, Boom users can load cash into their accounts only at participating retailers such as 7-Eleven, at merchant associations and at Cardtronics' financial services kiosks.

"Most people operating in the mobile payments space aren't really solving a problem," says Barhydt, a New Jersey native who got an undergraduate computer science degree from the Stevens Institute of Technology in Hoboken and then went on to work at NASA, the CIA, Goldman Sachs and Netscape. "Migrating the growing cash-using [immigrant] middle-class consumer from cash to the banked world … that's the problem that we are trying to solve."

m-Via's money-movement process starts when a user opens an account at a cost of $25 a year. Boom members can then move money outside the U.S. for free, sending relatives or friends in other countries cash through the use of text messages. m-Via works with CBW Bank of Weir, Kan., to open the accounts.

The pricing model allows three free monthly cash withdrawals. Users also receive a Boom co-branded prepaid MasterCard.

m-Via is working with associations of overseas merchants, such as Diconsa, which is managed by the Mexican government, says Barhydt.

"That's a benefit that I could see if you are playing to that niche of people who need to move money [across borders],"says Nicole Sturgill, a research director in the retail banking and cards practice at CEB TowerGroup. The fees are going to be much higher with other companies, or even a bank, Sturgill says.

m-Via also acts as the processor of those transactions, and hedges against money laundering and fraud by creating transaction rules around the accounts that search for dubious payments.

For related coverage see AmericanBanker.com

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