M-Com, an established New Zealand mobile banking and payments player, is quickly becoming a force in the U.S. The company, which had earlier this year migrated sales and marketing execs to Atlanta and landed its first U.S. platform client in Washington Mutual made its biggest splash to date when it was chosen in September as Fiserv's partner to build out the new Fiserv Mobile Money platform.
The Brookfield, WI-based financial technology firm is offering up Mobile Money as an integrated solution for its thousands of core and payments clients, although it will work with non-Fiserv apps. Fiserv launched it as a full-fledged solution covering any delivery platform: SMS/text, browser or application-based. Fiserv and M-Com are already teaming at Fiserv's Norcross, GA campus to start work on the next-gen platform that will include integration to any resident core, online or e-payments system.
The M-Com/Fiserv partnership is par for the course for mobile banking plays: vendors with multiple ways to gain consumer adoption and bridge to mobile payments are selected as the best way to access a critical mass of client institutions. M-Com/Fiserv follows the example of mFoundry's partnership with Fidelity National Information Services; Qualcomm Firethorn Technologies' link to Fifth Third Processing Solutions; and Monitise forming a mobile banking joint venture with Metavante (Monitise Americas).
According to a recent report from Gartner, this latest deal affirms a ground shift to enterprise mobile strategies, where bankers will look for mobile applications that can be integrated today into the bank's multi-channel infrastructure. Serge van Dam, M-Com's marketing vp, says the new approach is advantageous to banks. "Fiserv gets all its revenues from banks, and Firethorn's business is enabling mobile operators to get a click-through through the future in mobile payments," says van Dam. "Banks will want autonomy," and Fiserv can guarantee a place in that environment as the technology evolves.
M-Com "already natively supports the payments models [coming] over the next three-to-four years," he adds, noting M-Com, unlike U.S. companies, brings from its home nation a proven background in payments and bill-pay environment with its BankAnywhere product.
M-Com arrives in the U.S. with a revenue model for m-payments; unlike in the U.S., banks in New Zealand and Australia charge for the service.
The company's deal with Washington Mutual did not include a payments plan at rollout. It's too early to see how that proceeds with WaMu's rollup into JPMorgan Chase, although van Dam refers to Chase as a client.
In its analysis of the M-Com-Fiserv announcement, Gartner points out the solution may be an option for banks to "upgrade" next year from another Fiserv mobile partner, Qualcomm's Firethorn Technologies. Gartner points out that future Fiserv initiatives-which will include support for P2P and remittance, marketing, transaction authorization, mobile wallet and contactless features-will be exclusively focused through M-Com technology and the Mobile Money format.
But Firethorn CEO Tripp Rackley says the M-Com deal doesn't impact any current arrangements with Fiserv or its CheckFree unit, which was an early partner in Firethorn's unique model to bring along carrier and third-party interfaces for a bank's mobile offering. Firethorn's major deals are direct implementations at larger institutions, whereas Fiserv primarily services a base of 6,000 community and regional institutions. "It's not an overly big issue to us that Fiserv as a corporation wants to sell a solution into the smaller financial institutions," says Rackley. "All of our relationships...[are] deals between Firethorn and financial institutions. I might feel differently about it if the contracts went through CheckFree."
Still, some analysts still see Fiserv a lost opportunity for Firethorn, making the Fifth Third deal crucial. "With Fiserv choosing M-Com as a holistic vendor for all three channels of mobile banking," wrote Aite Group senior analyst Nick Holland, "Firethorn needed another distributor to expand their reach."
Even as Fifth Third allows Firethorn to move downstream, Holland suggests Firethorn might need browser and text chops to "fix this gap."