SMALL CAP VALUES
THE ability to check your balance on your mobile phone is arguably useful. But is it useful enough that consumers will take the time to download a piece of software to do so?
MONITISE offers a great service. Users can check their balance, view a mini statement and add credit to mobile phones, via their mobile phones.
The company has chosen the obvious partner to launch such a service, forming a joint venture with ATM network Link and its payment processing partner Voca.
It has signed up a series of banks, including HSBC, first direct, Alliance & Leicester, Royal Bank of Scotland, and NatWest, to the service. The other banks are likely to follow suit for fear of being left behind.
Monitise has also partnered with Vodafone, Orange, O2, T- Mobile and Hutchison 3G and says its service will be accessible to one third of current account card holders in Britain this autumn.
The problem is making those account holders care.
The banks themselves could take up the cause and throw their marketing spend behind mobile banking, urging customers to try this new and exciting service.
Otherwise, banks could use mobile phones for a second point of authorisation for internet banking. The idea being that when you login to a site with your account number and password, it would then send a code via Monitise software to your mobile phone, which users type into the site. They would then be forced to download the software in order to continue internet banking.
None of this has yet happened. Banks are apparently in “active discussions” about the so-called two factor authentication process, and Carphone Warehouse has started promoting the service, but there is some way to go.
Once mobile phone operators start pre-loading the software on to handsets, Monitise will have it made. But the phone operators do not want to be pre-loading software consumers do not want, so they will first need to see significant demand.
So far it has tens of thousands of users, and Monitise hopes to have hundreds of thousands by the end of the year.
Investors have been unkind to the stock, which has tumbled 38pc since the company demerged from Morse in June, without any significant newsflow. The problem is there may not be any significant newsflow for some time.
Still, it seems inevitable that we will eventually use our mobiles for simple banking at least.
A risky buy.