With the announcement that three financial institutions are using its system, Monitise Americas LLC signaled a broadening of the fledgling mobile banking and payment technology to include a new market: community banks.
The New York vendor, a joint venture of Metavante Technologies Inc. of Milwaukee and Monitise PLC, a British specialist in mobile banking technology, said Tuesday that the $227 million-asset Harvard University Employees Credit Union of Cambridge, Mass., the $224 million North Jersey Community Bank of Englewood Cliffs, N.J., the $329 million-asset Sutton Bancshares Inc. of Attica, Ohio, and Sutton's Greenlink Payment division are now using its technology.
Frank G. D'Angelo, a senior executive vice president and the president and chief operating officer of Metavante's payments group, said 25 or 30 clients of its NYCE debit network have made verbal commitments to use Monitise.
"If the big FIs do it, the little FIs need to do it just out of self-protection," Mr. D'Angelo said.
Metavante, which spun off last month from Marshall & Ilsley Corp., plans to offer Monitise to the 2,500 financial institutions on the NYCE network, he said.
Lisa Stanton, the executive vice president of Monitise Americas and its head of operations for North America, said it offers advantages for small banks because it uses the same information delivery system as automated teller machines.
"We're already on the payment rails, and we've got all your card information," she said. "Now we can get interchange, because we use the ATM payment rails."
Bruce Cundiff, an analyst at Javelin Strategy and Research of Pleasanton, Calif., said that the payment business offers bankers an opportunity to make a profit, but not yet.
"This is definitely a mobile banking play, not a payments play, at the moment," he said. "There is immediate value in that the banks already connect to the NYCE network," which allows banks to deliver account balances and move funds from account to account.
And because the mobile system uses the debit switch, a connection that the banks already have, "it kind of levels the playing field for smaller banks," Mr. Cundiff said.
Monitise uses text alerts and a downloadable application to let handsets connect to the institutions over the debit network.
Mr. D'Angelo said the system would work with a broad range of devices. "For mobile payments to work, it's got to be ubiquitous — ubiquitous to the telcos, ubiquitous to the handsets."
He compared mobile payment systems to debit cards. "I expect my card to work at any ATM, anyplace in the world, and miraculously it does."
And the evolving infrastructure for mobile services is going to be complicated, he said. For instance, Metavante provides hosted core processing for Synovus Financial Corp. of Columbus, Ga., but Synovus uses CheckFree Corp. of Atlanta to provide electronic bill payment and presentment services, and Firethorn Holdings LLC of Atlanta for mobile banking and payments.
(CheckFree has agreed to sell itself to Fiserv Inc. of Brookfield, Wis. That deal is expected to close this year. Firethorn agreed this month to sell itself to the San Diego mobile provider Qualcomm Inc.)
It will take time to win consumer acceptance for mobile services, Mr. D'Angelo said. "I see it catching on slowly. I don't think it's going to be a barn burner."
Mr. Cundiff said that the vendors are coming to market with a variety of strategies — Firethorn is focused on the mobile carriers, for instance, while Monitise is built around the debit network.
"Each of them is coming at this from a slightly different angle, and that may appeal to different segments of the financial industry," he said.
