HOT COMPANY PROFILE: Mobile banking and payments service MoBank

Interview with CEO Dominic Keen

With smartphone adoption continuing unabated, a host of companies focusing on helping consumers shop on their mobiles are emerging. London-based MoBank is targeting both consumers and retailers as it aims to facilitate mobile commerce throughout the UK. With retail partners including Waterstones and HMV, the firm recently linked with payments-processing company, WorldPay, to broaden its reach, and CEO Dominic Keen believes that MoBank is well-positioned to capitalise as consumers become more comfortable shopping on their smartphones.

¤ What makes MoBank different from other mobile payments firms?
We focus on mobile commerce and supporting brands, particularly retail brands, to take their offering into the mobile area. We also operate in the financial services area to help financial services brands support mobile account servicing. All of our services effectively allow end users of services to do a whole variety of day-to-day, low-value, high-frequency type purchases.

In terms of retail partners, key people are companies such as Next, HMV, Waterstones and Game Group, and we’re increasingly focusing on slightly smaller companies, on a much more distributed platform product. We’ve recently partnered with WorldPay, which controls a really good chunk of the UK’s online merchants, providing their payment services. So we’re now extending our service into mid-sized retail brands. We’ve got a launch of that platform product [in February], which makes it very easy for mid-size online retailers to start extending their services into mobile. Because what we’re seeing is that in excess of 15% of all their traffic is coming through mobile devices, and those e-commerce sites that don’t support mobile are effectively losing all of that business.

¤ What is your business model?
Over the last 18 months, we’ve moved entirely towards a model that’s predominantly pay-per-purchase. So for every transaction that goes through our system, we look to take a sliver of value out of that transaction. By doing that we keep the up-front costs for the brand or the service provider as low as possible, giving them an easy way to get to market with mobile commerce.

The revenues for last year were a little bit above GBP500,000 (USD790,000), with around just under 40% of that coming from kind of per-transaction and recurrent revenue streams. Off the top of my head we did something like 700,000 mobile transactions last year, equating to just a little bit over USD100m worth of volume.

At the basic level we are profitable, but we’re actually investing very heavily in growing the business and the volume. We’ve just USD2.5m in funding, and we’re expanding the business on the basis of that financing, to drive up our top line and just bring as many merchants and transactions onto our platform as we can, as quickly as possible.

¤ Who are your main competitors?
Certainly in the enterprise sector in the UK, the other kind of major competitor is a company called UsableNet. They’re actually a US-based company, but they’ve got a couple of big wins in the UK as well.

¤ What’s the biggest challenge you currently face as a company?
What we’re really putting all our energies into at the moment is bringing as many merchants as we can onto our platform as quickly as possible. It’s about making sure that mid-sized websites, particularly non-technical owners of websites, know that it’s now easy for them to start monetising their mobile traffic more effectively, and giving them really simple, straightforward solutions to do that.

¤ What do you think is the hottest trend in digital media?
Certainly from our perspective, this huge phenomenon of consumers getting much more comfortable buying stuff on their mobile phone is amazing. To see people doubling the volume on a six-month basis is just a phenomenal trend. And I think for certain categories, such as fast food, and consumer media, there’s very little consumer resistance to buying a lot more of their total spend in those areas through mobile devices.’

MoBank is growing, and ensuring that everything is in place to tackle the increasing number of mobile shoppers. Already profitable “at a basic level”, the firm is now building out its platform with a recent round of VC funding. Keen is setting the company’s sights on Western Europe, with a number of sales partnerships in place in Italy and the Nordics. In the UK, half of smartphone owners already use their mobile to shop,
according to a report by Forrester and PayPal, while separate research by Barclays Corporate claims that UK shoppers will spend GBP19.3bn (USD30.5bn) on purchases made via mobile devices by 2021 versus the GBP1.3bn (USD2.05bn) spend today. One of MoBank’s biggest challenges is convincing these mobile shoppers that its platform is the one to plump for.

The startup is moving in the right direction by targeting medium-sized retailers to supplement the big-hitting clients it’s already partnered with. Keen believes that consumer adoption is not a barrier to mobile payments, as smartphone advances and word of mouth will drive that regardless. However, merchant adoption is key to the success of any mobile payments platform, as Square and PayPal have both shown in recent months with their respective services, and by making a large push to expand its partner portfolio, MoBank stands well-placed to receive the incoming wave of mobile shoppers.


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