CANNES – Mobile payments developer Network365 has won its first global banking customer for its mobile messaging platform, it was announced at the 3GSM World Congress this morning.
The Wicklow-based company, which was voted Best Wireless Applications Developer at last year’s GSM Congress, announced that TODO1 (pronounced Todo Uno), a leading online banking and e-services company based in Miami, Florida, has chosen mzone SMS Banking as its core platform to offer mobile banking services in the Andean region, which covers Venezuela, Colombia and Ecuador.
TODO1 is a consortium of four leading independent banks in the region – Bancolombia and Conavi in Colombia, Banco Mercantil of Venezuela and Banco del Pichincha of Ecuador – and US corporations McKinsey and JP Morgan, which provide electronic services to the banks’ six million customers.
According to Ricardo Sagrera, manager of wireless services at TODO1, the Network365 solution was chosen to extend electronic services to a greater proportion of the banks’ customer base. The firm had previously developed a successful online banking service used by 450,000 customers, but given the relatively low level of internet penetration the service had limited growth potential. “South America generally has low levels of internet penetration and PC usage and the fixed-line infrastructure is poor,” Sagrera told siliconrepublic.com. “However, most banking customers have cellular phones. We decided that an SMS-based system would allow us to reach far more customers,” he continued.
Sagrera added that TODO1 has installed and is currently testing Network365’s mzone Agora, the messaging platform on which the service runs and expected the first services to be launched in Ecuador within six weeks. The four banks concerned are currently in negotiation with the network operators in each country to get them to sign up to the service. Sagrera was hopeful that half a million customers would be using the service by the end of its second year of operation.
The short messaging service (SMS) banking system will allow banking customers to conduct a number of banking transactions using their mobile phones – fund transfers between accounts, balance checks, chequebook requests – as well as sign up for a service which will send them text alerts based on pre-defined criteria such as their balance falling below a certain level. The banks intend to charge customers a flat monthly fee for the alert service and will enter revenue sharing agreements with network operators on the text messages sent by users of the service.
For its part, Network365 earns an undisclosed licensing fee from the deal, a fee that will increase if the number of SMS transactions reaches a certain level.
To date, the software developer has signed up a number of mobile operators to its mobile messaging and payment products, including 3 (formerly Hutchison 3G), Hong Kong CSL and O2, but today’s deal represents its first banking customer. According to John Hurley, vice-president of marketing, the contract does not signal a shift in strategy to court banking customers instead of network operators, but is simply a parallel route to market. “There are more banks than network operators in the world – that’s the reality. And who do most people associate with secure transactions? Banks,” he said.
Hurley added that he saw the deal as a springboard to clinching new business in other South American markets. The firm opened a Latin American office in Sao Paulo, Brazil last year in order to realise such opportunities. He said that the company was in ongoing discussions with one leading Irish bank and two others in Northern Europe regarding the SMS-based banking system but said the banks were holding back and had yet to “pull the trigger”.
By Brian Skelly