Banking Review

Bankers dance to Mambo

BPAY is again trying to revive its Me at My Bank Online payments scheme,
which will help fine-tune bank account portability

BY CHARIS PALMER

BPAY’s controversial MAMBO project is a step closer to becoming reality with the appointment of an unnamed vendor to help develop the product.

MAMBO, which stands for Me at My Bank Online, would see individuals register for their own BPAY code, which could be used to facilitate payments. Consumers could then port their code from bank to bank without the need to re-establish direct debits or credits, and use it to enable online payments.

MAMBO has been in development for more than two years, and was shelved in 2008, before being revived in 2009 in response to renewed pressure from the Reserve Bank for innovation in online payments.

Recruitment consultant Matt Brooks recently placed several position vacant advertisements for a business analyst at a global vendor based in North Sydney. The advertisement says the vendor will be “playing a key role in developing a new, cutting edge, BPAY payments product that will revolutionise BPAY payments for business and retail banking”.

Brooks declined to name his client. BPAY declined to comment on the project.

The advertisement states the initial eight months of the contract role will focus on product development, after which the product will be rolled out to new clients, with the role becoming more client focused.

The hiring comes as Kiwibank’s new chief executive Paul Brock told the New Zealand Herald he would love to see bank account portability introduced in order to make bank account switching easier.

The New Zealand payments industry is currently undergoing a restructure, with the banks planning new processes that would allow switching customers to only advise the bank they are switching to, with the old bank then required to redirect automated direct debit payments.

Online Banking Review understands the portability planned as part of MAMBO would work in a similar way to mobile phone number portability, with a BPAY ‘Address’ that is not permanently tied to a financial institution, but can be transferred to another financial institution.

The Address would be linked to a bank account, and if the linked account was closed, the financial institutions administering that account would be required to link to a new account or close the BPAY Address.

Other key aspects of the project include the addition of online merchant payments and person-to-person payments, with a messaging system that allows individuals or merchants to send payment requests via the MAMBO hub to the recipients’ linked online banking service.

Unlike other bank account-based online payment portals such as POLi, MAMBO would not link customers making an online payment at a merchant site to Internet banking. Instead, the MAMBO hub would issue an authorisation code (via SMS) to the payer, who must then enter that into the merchant site to enable payment from the linked account.

BPAY View on the out?
The inclusion of bill presentment and payment via the MAMBO hub means BPAY will most likely move towards retiring the BPAY View platform. BPAY View was launched in 2002 and is currently offered by 75 financial institutions, with about 40 billers signed up.

It could take years for banks to earn back costs generated as a result of the MAMBO project, but at risk is millions of dollars in interchange fee revenue, which the Reserve Bank may move to reduce should the industry fail to deliver online payments alternatives to current credit card-centric offerings. In May, the Reserve Bank announced it would undertake another strategic review of innovation in the Australian payments system, with the objective of identifying areas in which innovation in the Australian payments system may be improved through more effective cooperation between stakeholders and regulators.

Meanwhile, PayPal, and individual banks themselves, may trump the long-running MAMBO project. PayPal is preparing to launch a payments technology specifically tailored for micropayments. PayPal told TechCrunch the new product would provide specialised payment support for micropayments for popular online purchases including online video, music, games, paid content, books and software.

PayPal director of new business and strategy, Andrew Rechtman, told Online Banking Review micropayments requires something different from payment providers and PayPal is looking to provide it. He also says, “We’re talking to a number of local financial institutions about how we can collaborate with them in enabling (person-to-person payments) within their mobile banking applications, and also integrate what PayPal can do in the mobile P2P space”.

At the same time ANZ is yet to detail its long term strategy for the recently launched GoMoney application that allows individuals to send money to others with just their mobile phone number. The application received 31,000 downloads within five days of being loaded into the iTunes store.