Money on the move
Since Monitise split from its creator Morse, the firm has enjoyed continuing growth. Sara Yirrell catches up with the mobile banking pioneer to find out its plans for future expansion
The tale of Morse and Monitise could almost be a story of Yin and Yang.
Morse had been known as one of the ‘big three’ UK resellers for many years, third only to SCC and Computacenter, until its fortunes started to slide and it ended up being sold to rival 2e2 for £70m in 2010.
Monitise on the otherhand, was incubated and eventually spun out of Morse back in 2007 and is currently on an upward trajectory, reaching cash break-even point in Europe in 2011, and harbouring aggressive growth plans after capturing a huge part of the mobile banking market when it was in its early stages.
Conceived at a time when smartphones were a way off in the future, many would have been right in questioning the sensibility of launching a company so reliant on mobile technology.
Speaking to CRN, Richard Johnson, group strategy director at Monitise, said the visionary abilities of chief executive Alastair Lukies, had played a huge part in the firm’s success.
“He had a brilliant idea back in 2002 about the concept of connecting mobile telephones with banking and really making it easy to use with a secure connection on a bank’s infrastructure. We were a little bit ahead of time, prior to the advent of the smartphone,” he said.
“People were not used to downloading apps and it was hard for them understand initially. Now it is automatic – the advent of smartphones in the developing world has sped the market forward.”
Since its humble beginnings, the company has gone global, boasting partnerships with most UK high street banks and providing services to over 250 financial institutions in the US.
It has more than six million users worldwide and has a global partnership with Visa Inc to deliver its services to more than 1.9 billion card holders.
Johnson said the emerging world was a particular area of growth for the firm because it was more flexible with new technology. “In the developed world we all have bank accounts and make a choice about how we buy things,” he said. “People are using mobile banking apps on average 20 times a month – whereas the average internet banking site is visited seven times a month. The reason that mobile is going to be so big is that it is so convenient.
“But in emerging markets, for example Uganda; 15 per cent of the population have bank accounts, but 60 per cent have mobile phones. For example someone from a rural village who lives and works away would have to travel for days to take money home to the family.
“Every village in Africa has a shack that sells mobile phone credit, Coca Cola and scratchcards. If I use mobile banking I can text the money to my family each month rather than making a long journey home each time. There is no problem with cash disappearing – it is all done through the technology,” he said. “We are also growing our reach in India and Indonesia as demand for the technology takes off,” he added.
“The journey we have been on as a company has been very interesting. We now have over 400 employees and our market cap is £350-400m on AIM,” he explained.
Johnson added that future growth is all about launching in new geographies, with more and more partners.
For example the firm is looking at a new system of mobile shopping in partnership with Visa and Carphone Warehouse, which allows people to make a purchase from a billboard, magazine or anything that has a picture of the product on.
“The stakes are high. All companies need to get more engaged with customers and get mobile. You cannot be seen as a laggard.
The internet is just a warmup act for mobile,” he predicted.
Monitise timeline
August 2006 – Morse splits in two and Monitise is created.
April 2007 – Morse demerges and spins off Monitise
October 2009 – Monitise celebrates its millionth customer
April 2010 – A struggling Morse is bought by rival integrator 2e2 for £70m
July 2010 – Monitise unveils its first joint venture with Visa and Standard Chartered Bank in India
Jan 2011 – Monitise reaches cash break even point in Europe
February 2011 – Monitise and Visa Europe sign a strategic partnership and in October the same year, Visa Europe invested £24.7m in Monitise plc to strengthen their commercial partnership.
March 2012: Monitise snaps up mobile banking and payment specialist Clairmail for approximately $173m – a move which makes it the largest mobile banking and payment firm in the US.