Mobile photo bill pay has been out for just a little while now, are you happy with the rate of adoption so far?
DeBello: Yes we’re very excited about the feedback so far from our live customers. This is all about consumer expectations and making it easier to pay bills. Right now very few bills are paid through banks -- Forrester says it’s about 15%. Complexity is preventing the adoption of online bill pay. So we’ve added a new weapon to bank’s arsenals to help them capture more of that market. We have nine banks signed up with licensing agreements; and four of them have gone live. We have two big banks live, U.S. Bank and BBVA Compass, and we have two smaller institutions, First Financial and City Bank of Texas.
Consumers love it because it’s so simple. We’re all about making solutions that fit the lifestyle of consumers around their mobile devices. It only takes one keystroke in snapping the camera to pay the bill; compare that to all of the keystrokes it takes to enter all of the information for online bill pay. U.S. Bank has a great advertisement for it that says “One pic is equal to a thousand keystrokes.” I think that sums it up really well.
Are you seeing similarities or differences in the rate of adoption compared to mobile check deposit?
DeBello: I think there are some differences. I expect the uptake will actually be quicker with mobile photo bill pay. Right now we have 898 banks with licensing agreements for mobile check deposit; 10 out of the top 10 banks are using it. So we have great coverage there, and I think that makes it a great proxy for mobile photo bill pay.
We have a quicker cycle to launch with mobile photo bill pay and consumers are now more familiar with using the camera for financial transactions. When we invented mobile deposit back in 2008 smartphones were stil pretty new. The iPhone had just come out in 2007. The whole concept was new. and we turned the smartphone’s camera into a tool for financial transactions, first to deposit funds into the account with mobile check deposit, and now we’ve enabled bill payments with those funds.
But consumers are now preconditioned for using the smartphone camera for transactions. Everyone of those mobile check deposit users is a potential customer for mobile photo bill pay. So I think we will get faster adoption than we had with mobile check deposit.
Why do you think that the potential market for mobile photo bill pay is larger than that for mobile check deposit?
DeBello: This is a solution that helps keep the customer happy. Online bill pay with all of the typing is too cumbersome. More than 50% of the population doesn’t use online bill pay.
Also, the banks are under pressure to retain growth and profitability. Consumers are willing to pay a fee to expedite a last second payment. If it’s at the end of the month and the customer sees that they forgot to pay a bill that is due in a couple of days, they’re willing to pay a little to have that transaction fast-tracked.
The check market is sizable -- around $25 billion. But the bill payment market is bigger because of the frequency of bill payments. New payees are added all the time. Banks that we talk to say that the average bill pay customer adds 4 to 6 new payees per year. Those could be new auto loans, new credit cards or a new mortgage.
The bill pay market is also a global market. Checks are primarily a North American phenomenon, you on’t really see them in other parts of the world. Bills are an international reality.
What do you see as the biggest challenges that you have to overcome to reach the full potential of that market?
DeBello: The number one challenge for Mitek is making everything simple. The algorithms that we create are incredibly complex. We have to properly pre-process the image of that piece of paper despite the wrinkles or scratches that could be on it. But now we just need to get it in front of the banks. It’s a matter of integration into existing infrastructure and with different mobile apps.
The thing that drives this is consumer demand. In the world today if people like it, they tweet it, and it spreads virally. Now banks [using our solutions] are getting compliments on their mobile apps. That’s the result of our work making everything as simple as possible.
I know that banks using mobile check deposit have seen an uptick in overall usage of their mobile banking apps. Have those banks that have gone live with mobile photo bill pay seen the same effect?
DeBello: Yes, we’ve actually seen banks take market share away from their competitors because of mobile photo bill pay with one of our larger customers. When we launched mobile check deposit there were 7 million mobile bankers [in the U.S.], now there’s 60 million. We take some credit for that. We’ve enabled customers to do more than just check their deposit with their mobile devices.
I also understand that you’ve recently launched a mobile photo balance transfer solution. Can you tell us a little about that and why you thought balance transfers would be well suited to a mobile imaging solution?
DeBello: Here’s the value proposition: banks are trying to attract new card customers with better A.P.R.’s or more rewards miles. They used to do this by mail, and it really wasn’t that effective. Now in the digital world we can got to where the consumer is -- on their mobile device. They just take a picture of their current statement and that info is sent to the bank, which can then make a counter offer with better A.P.R. or rewards. That offer is sent back to the customer in the mobile app and they simply click “Accept.” They then receive their new credit card in about a week in the mail.
People are asking what else can we do with mobile imaging as a strategy. San Diego County Credit Union [the first institution to launch mobile photo balance transfer] now has both check deposit and balance transfer. It’s becoming a mainstream strategic consideration to help engage the customer on a deeper level.
What are some other areas where you see good potential for using mobile imaging?
DeBello: We think there’s a good opportunity in regards to capturing info from government I.D. documents to help with customer enrollment. Think of the times that you have to present a driver’s license when you enroll for a credit card at a retail store or when you buy something online. You have to hand over the I.D. and the representative types in the info, or for an e-commerce transaction you have to type it in yourself, in which case you tend to opt-out. So we see a pain point there that can be solved.