With the ink barely dry from closing its acquisition of mobile banking provider Clairmail Inc. on June 26, Monitise PLC is preparing to carry a stronger message to banks in the U.S. about financial institutions' role in mobile payments.
It's been London-based Monitise's mantra all along – that banks should be in the forefront of a payments world moving toward mobile commerce, according to Monitise CEO Alastair Lukies.
PaymentsSource: With Clairmail in the fold, what would be the key message that Monitise would now bring to potential new clients?
Lukies: There are three major areas now that banks should focus on. The first would be mobile banking, which is something that all consumers would understand the logic [of] because they manage their bank account from a mobile phone. The second is … remote payments, from one person to another, with the person's mobile phone number serving as the proxy to the bank account. In addition, there is the tap-and-go technology of mobile payments that everyone is all excited about. Third is mobile commerce, and this is about to wake up with a pretty big bang.
PS: It seems that the banks would be all ears when it comes to mobile commerce, considering all that is going on around them in the mobile world.
Lukies: Mobile commerce is the largest prize, and that's where banks and traditional payments companies face their biggest threat. Consumer interaction and trust [with the provider] are the most important things, and the banks have that trust.
PS: Has Monitise had to change its philosophy or view of how banks should fit into a mobile payments world?
Lukies: Monitise has not changed one line of its business plan. We want to defend and extend the role of banking in the mobile commerce ecosystem. Banks should be using the same platform that their customers are used to so that the bank brand is front-and-center, no matter whether the technology is a software application or Near Field Communication at a transit system. In our view, all of mobile commerce should come from a bank provider in a closed-loop deal from the bank.
PS: It seems that Monitise positions itself as a clearinghouse of sorts for all things mobile, so that banks have a partner helping them stay abreast of technology. Is that an accurate statement?
Lukies: Monitise operates only as an "enabler." We do not want to own the banks' customers. We want to provide the mobile payments infrastructure for them. In all previous channels, whether it was ATMs or other services, the banks have been in control of the supply chain. The problem now is that different types of companies are after their customers, and the Apples and Googles of the world are five times bigger than the biggest banks in the world.
PS: Putting it that way, banks could suffer paralysis from analysis in waiting along with the rest of the payments industry to see who or what survives in a mobile world.
Lukies: It's a perfect storm right now, with everyone trying to get the consumer to use a mobile phone for payments, and the banking industry should be front-and-center. It's important that banks don't sit and watch and wait. They need to be in it to win it.
PS: But with so much at stake, would there be a danger in rushing into a wrong decision?
Lukies: If banks wait until 2015 to determine if Google Wallet is the answer to mobile wallets, it will be too late for them. The consumers will have already decided and there would be no reason for them to switch to what a bank is offering.
PS: Does Monitise have a specific mobile payment technology it embraces or advises clients to pursue?
Lukies: Monitise has to be absolutely agnostic regarding technology decisions. We are not trying to win arguments about the best technology. Rather, we have to provide what the banks want. Ultimately, the consumers will vote with their fingers and their phones. But we don't go into a banking client and say we have a partnership with a certain vendor, so you should really use their phones.
PS: But wouldn't it be difficult to allow a bank to move forward with a technology that your experience would suggest would not be a good fit?
Lukies: With Clairmail's strength in mobile banking, and Monitise's strength in remote payments and mobile commerce, we can service the bank by telling them we have great "tool kits" in place now. We can go into the banks together and ask them what they would like to do.
PS: If one aspect of the payments industry were to hold true across the board for the banks, networks, processors, gateways and security vendors, it would have to be the ability to adapt to rapid change. Do you agree?
Lukies: It is important for banks to be in a position to innovate quickly and keep up with the speed of the market. We can definitely help them with that. The idea banks have to embrace is that when mobile commerce really takes hold, and it really matters, banks will have the customers in place.
PS: While the concept of banking and making payments through mobile phones continues to have some naysayers who are seeking that compelling reason to forgo plastic cards, it seems a more natural transition to all of this would be mobile banking. Are you seeing that as well?
Lukies: In the U.K., the average consumer checks his bank account balance 20 times a month through a mobile phone, as compared to six times through online banking. So it's all about consumer engagement, and it's coming quickly through mobile banking.