ApplePay, Challenger Banks, e-commerce, eWallets, mobile banking, SamsungPay

Why are there so many Financial Health apps now?

The trend of mobile banking apps is rapidly growing around the world.  I’ve counted more the ten in UK and hand-full in Europe and the United States.  They are typically built in partnership with either MasterCard or Visa and often have a sponsor bank or are in the process of getting their own banking license (which is harder in the United States) to support and maintain their activities.

If you’re between 20 and 35 years old you’ve probably heard of one of them and if you like technology and money management app, you’ve probably downloaded one (or more) and used the service.  But, is this better than the traditional banking experience? Throughout this piece I’ll try to detail why the market is heading in the mobile only direction and what it may look like in 4-6 years for the incumbents and what impact will it have customers.

Who are the major players?  The mobile banks in the UK are the most advanced, so let’s focus here. 

Monzo Bank have probably been the most visible in the market, with the unique ability to create a tribe within a short period of time.  The have used a combination of VC money and customer adoption through crowd funding – which I think they broke a record and a user experience that was one of the first to provide a different flow to the banking experience.

Starling Bank and N26 are not far behind with a great user experience and a more European approach, rather than just the UK.  N26 have also announced they’re opening their services in the US in early 2018.

BBVA are one of the worlds largest banks and have been strategic about how they are approach the new generation of banking.  They have made some acquisitions on the mobile banking space in the United States through Simple and Holvi in Estonia. They are also creating a culture and marketplace to enable entrepreneurs to use data to build the next version or feature of the banking experience.

 Customers – Do customer need a better mobile banking experience?  Yes, apparently, we do.  The customer need is there.  The market indicates that customers want more from their bank and want it on mobile.  The majority banks are still transitioning to a successful mobile banking experiences and this is where the new start-ups have found an opening and customers are agreeing.

What are they looking for?

Flexible Spending and Transnational Overviews – good engineers and designers can create awesome visual concepts when it come to data.  And especially on mobile, where our focus is only for seconds before we switch to the next app.  Banks like Monzo and Starling have nailed this and make the user experience the core feature of the bank and got users saying longer in their app.

Payments – Mobile Payments have also increased the visibility of banks on mobile devices and decreased the friction to enter the banking app.  Mobile Payments like Apple Pay and Samsung Pay are new and not widely used (but are widely available) also focus on the user experience and convenience and most mobile banks are support the most common forms of mobile payments.

Financial Goals – Gone are the days where we keep cash under our mattress of a rainy-day fund. Now we can use mobile banking apps to help us refine our spending habits and guide us to save more for specific goals, like holidays – which is actually a good idea – but I’d prefer to save for a bigger purchase, like a house.

Fundamentally, the product that is being built is a bank account, a current or saving account primarily. Probably a credit facility in the future, like credit cards or mortgages.   But they are also doing something different;

Cloud Based – One hundred percent in the cloud.  Provides them flexibility to grow fast and add new features easily.  This is a given in 2017, but some traditional banks are still assessing the future.  This doesn’t provide a competitive advantage for customer acquisition, but hopefully reduces cost for these mobile banks.

Business to Business Transfers (faster payments) – the UK market is miles ahead in payments and clearing functionality and many start-up banks have already plugged into the network and are processing payments for big business payrolls and Governmental activities already.

Card Acquiring Services – Like many incumbent banks who are acquiring platforms and process billions of dollars of transactions, Start-up Banks want to join the club.  The major benefit is that merchants directly or via payment processor can integrate directly into the acquiring platform, like a Stripe API connection.

Third Party Partnerships and Open API (marketplaces app store) – This is a concept that we’ve heard a lot of recently, but its put into place here. For example, YoYo is an email receipt service for mid-tier merchants in the UK and customer can use this service with several start-up banks for their purchase reconciliation activities.

So, what’s next?  Many of the challenger banks have raised large rounds to build a bank from the bottom up, which includes the infrastructure and security, which is primarily cloud based.  They also focus on the customer, the user experience from becoming a new user to the day-to-day activities that users want to focus on.  This allows them to be flexible and enable new features faster and get customer feedback in a more structured way.

In general, the numbers are good for the larger banks, they have seen the trend in mobile first banking and are constantly improving and updating their apps to make them more user friendly.  Obviously, there is still a gap between them and a Facebook or Uber app, but closing fast.

Because there is feeling in the market that traditional banks are bad and don’t understand technology and want the new generation of bank account holders really want.  Which is, a Facebook like banking experience

 However, how are they going to make money when the VC capital is gone?  My guess is that their trying to get customer growth and eventually looking for an exit via a large bank that is looking to appeal to the younger generation and mobile first generation.  The most obvious outcome is that these start-ups get acquired by a larger Financial Institution or tech companies that are looking to expand their financial offering to a non-traditional segment of the market.

 The next five years in the financial app space will be exciting.  Already we see Financial Institutions like, JP Morgan Chase acquire mobile only bank, Finn.  It has also been reported that Monzo has had offers from several larger Financial Institutions but have not accepted at this point and have indicated they want to go it alone and truly build a bank of the next generation.  I think this is important for the future of banking because they’re independent and can test and try new ways of meeting customers banking requirements in different markets.  The constraint they’ll have is how to grow the customer base big enough were they become profitable without forgetting about the customers they started with.

I think the future is bright for the next generation of banking customers.  Technology can help us have disciple when it come to saving and planning.  But of-course we still have to follow-it.


AndroidPay, ApplePay, Challenger Banks, ChasePay, e-commerce, eWallets, Loyalty, Loyalty Programs, mobile payments, Payments Ecosystem, SamsungPay, Sharing Shopping Data, TechVBanks, Tokenization, Uncategorized

Will the Mobile Payment landscape mirror of the American political scene?

dolandMobile Payment are in a bubble in the US.  Geographically, that is. Blue states are typically the most common mobile payment (and technology) consumer friendly locations.  Red states are typically reliant on plastic and more importantly cash (less technology) to make a payment.  This technology adoption follows the 2016 US Presidential election voting trends.

With the result of the Election and the Republican party winning an election fought on miss-information and half-truths, its interesting to reflect on how the next four years will impact technology innovations and Mobile Payments.

The campaign was won partially on the promise of bringing back jobs in the industrial sector and others that are being taken over by technology.  A comparison in the mobile payments industry, is like promising new building for banks branches in the US because it will provide more jobs, even though most Americans are performing their banking activities online.

Can this rebuff of technology and progress in the real world also happen in the mobile payments ecosystem?

The growth of mobile payments can only be successful if it covers the nation and we get more and more customers to change their consumer behavior to scan their phone at the terminal, rather than swiping a card (or even carrying cash).

The result of the election has clearly shown that technology advancement and innovation doesn’t always move as fast we think and many members of the community often perceive technology advancements threats.

So, how does the Mobile Payments Industry prevent technology moving too fast and leaving 51% of America behind, while maintaining a steady growth pattern of consumer adoption and technology improvement in the near and short term.

Is there already an inbuilt emergency brake?  In the shape of the Chip & Signature process?  I heard a statistic the other day, that it takes 38 seconds to complete a EMV transaction request on a terminal.  That is indeed not a technology improvement.  In Europe, it a sub 10 second process to complete the cycle.  Its interesting to look at other markets around the world.  In Europe, The Netherlands and Sweden are much smaller countries but have diverse demographics in cities’ and in rural areas but are moving faster towards a cashless environment than anyone else and have done it within a very short time.

Mobile Payments is totally the future of payments for many Americans living in progressive cities but its going to take much longer to cover the entire United States.  The US smart phone coverage is a pretty good indicator of this, we saw over the last 10 years’ smart phone coverage has expanded to all corners of the US, even if the model of the phone are several years behind.

It’s a pretty good bet the mobile payments will be the most popular way of paying in the future, but for now there is still a part of American society that want to walk slowly into the future and use the traditional cash or credit card payment option, which are perfectly fine.  However, unfortunately they’ll have to figure out mobile payments, because it maybe the only way to pay in 5 to 10 years’ time and banks and technology merge closer together.


AndroidPay, ApplePay, Challenger Banks, ChasePay, e-commerce, eWallets, Loyalty, mobile payments, SamsungPay, TechVBanks, Tokenization

Mobile Wallets & New Banking


There is a small battle going on in the payments world that may soon come to the surface.  The world is now seeing the era of mobile payments and the focus is on the consumer adoption and growth of the industry. The underlying questions is, which wallet, from either your phone maker or your bank will you use?  As the mobile wallet market matures, consumers will demand more from their banks and phone makers need to do more than just payments.  Consumers want one place where we can do everything, like point of sale payments, banking activities, loyalty activities and online and in-app purchases.  

The struggle will be between phone makers, like Google, Samsung and Apple and Financial Institutions, such as Chase, Citi Bank and Bank of America and new challenger Banks, like Mondo and Curve. The new banks are positioning themselves as different to traditional banks by focusing on the added value to the customer, for examples; creating an easy way to view my monthly purchases categorized in an easy way on their phone. This is not a massive banking disruption, but the openness and future possibilities make this an exciting time to watch the banking industry.  The future possibilities are very interesting, as no traditional bank has really opened their API’s to outside parties. Companies such as are creating a platform that will be driven by a single savings account, which will be the trigger for all other banking activities. It will allow you to eventually link the app or API to your device so users can make payments at the point of sale, split bills with friends and maybe also build a better relationship with merchants to leverage a loyalty platform.

The banking industry is moving towards the mobile platform in a fast way and the mobile device will be the enabling force for banking change. Google, Apple and Samsung have platforms that allow interaction between the software and hardware, which is a critical component to ensure the security and integrity of the banking data. The provisioning of a credit card to the wallet and the security mechanism is a service that both Visa and MasterCard have generated to ensure a generic solution is available across the board. It also allows both to keep control of the process.

Using the Secure Token or the TPM to authenticate the phone and the user is a unique hardware security measure that will reduce the risk of device cloning. The IDMV data elements and passing of data to the issuing bank will inevitably be the decision maker on the customer and the transactions from the device. It’s the banks decision to allow a user to provision their credit card to the specific device and also perform any banking activity within the wallet. If the bank receives more data on that customer, like their historical transactions for all merchants (which is user generated), will provide a greater amount of data to the bank to make decision about what the customer can do.


Mobile Device Generated Wallets

  1. Apple Pay – The pioneer in the mobile payment space.  Apple wrote the specs for the Tokenization service with the credit card networks and have allowed banks to leverage this functionality with other wallet providers.  Apple products enhancements are typically customer focused and often industry changing and will surely make the next iteration of the wallet a game changer.

  1. Android Pay – The true designer of the HCE functionality for wallets linked to phone for security measurements us the TPM.  Out of all the wallets, Android pay is making strives with the loyalty component.  Allowing user to use loyalty points (i.e. the Coke-a-Cola example) to pay partially for a product, within the checkout process. However, Google released a Wallet many years back and haven’t completely dominated the market.

  1. Samsung Pay – Samsung pay is getting a lot of visibility in the market and is moving faster to get global roll out.  With their acquisition of LoopPay, they can leverage the benefits of Magnetic Secure Transition, which is a way of differentiating themselves from Apple Pay.

Banking Generated Wallets

  1. Chase Pay – Multiple banks have launched their own wallets to allow customers to leverage their online banking activities and mobile payments via MCX platform.  Chase has 50 million cards on file, so it’s easy for them to leverages those into a Chase Wallet.

  1. Citi Wallet – CitiBank leverages the functionality of MasterCard’s MasterPass to enable customers to use the wallet.

There are several other alternate NFC payment solutions on the market that enable users to use their payment instrument within a device, like a watch or band. The major problem is that these devices doesn’t really allow you to do anything else. It’s really restricted to the transaction activity of tapping on device.

The battle is defiantly between the banks and phones providers to capture the customers banking activities. There are two aspects to consider;

Banks leading the way

For a US bank to excel this space, there are several points to consider;

  1. Banks should link their mobile wallet to a phones operating system and leverage the security aspects of the phone.

  2. Create a consumer banking platform that can allow all types of banking tools (including payments) and services that consumers what with their banking activities

  3. Partner with or buy a stake in a phone company, HTC would be a great candidate in the US market. A mid-sized bank could make a huge play for new customers with linking their wallet to a phone.

Banking data is something banks have a lot of and they need to leverage it. Empowering the merchant with more profile data can positively effect the users experience with merchants at the check-out and for merchants increase sales and revenue. But this will put much more pressure on banks and phone providers to ensure their risk profile systems are accurate.

Tech Companies changing directions

Tech companies often break out into different areas of business in an attempt to increase revenue. Few have ventured in the banking industry. Companies like Facebook and Google have explored with their relevant money transmitter licenses, which allows them to hold funds on behalf of their users. But none have applied for a full banking license.

Companies like Apple and Android have the technical platform to ensure the security of the banking details and also the ability to reduce the amount of friction for users to do all their banking and financial activities. Banking aspects such as, providing credit lines for specific users for specific types of products. Similarly, it would allow users to send more information to merchants during the transaction cycle to ensure they are leveraging a user’s loyalty and reward’s program. Fundamentally, there could be a situation where a wallet provider/platform that becomes an issuing bank could build a relationship with large merchants to process transactions directly with the issuer, bypassing VISA and MasterCard.

The next five years are going to be really interesting as the mobile payments market matures and grows internationally. Banks will also be finding new avenues to get more customers and offer more banking services that we are seeing from the smaller challenger banks.

Recent news is evidence that large traditional bank are now taking notice to the change and trend in challenger banks, with the Holvi, the European online current account banking platform being bought be BBVA. Mobile Payments and New Banking is moving full steam ahead and both tech companies and traditional banks will be fighting to gain control.