When CashEdge demo'd its new person-to-person (P2P) payment solution, POPmoney, at Finovate in September (video here), they said they expected four clients to be live by year-end. It looks like the first one is there, or almost there.

First Hawaiian Bank has a lengthy POPmoney FAQ posted on its website (see screenshot  below). Pertinent details on the new POPmoney service include (refer to full text below):

• Cost is $1 per transaction
• Users can send money via email address, mobile phone number, or directly into the recipient's bank account (if known)
• Online banking customers will find it in the Transfers section under a tab entitled Send Money
• P2P payments are limited to $5,000 per month subject to a daily maximum of $1,000 via email/mobile or $2,000 transferred directly to another bank account
• Payments can be scheduled up to one year in advance

For more on the P2P payments market, see our latest Online Banking Report, published 15 minutes ago: Making the Case for Person-to-Person Payments. 

First Hawaiian Bank's POPmoney FAQ (link; 8 Dec. 2009)

FAQ text:

What is "POPmoney"?
"POPmoney" is a feature of the FHB Online® banking service that lets you send money to someone electronically via their email address, mobile phone number, or directly to their bank account. Payments to someone's email address or mobile phone number are accompanied with a personalized message letting them know that the funds are available for electronic deposit to wherever they choose, while payments to someone's bank account are deposited automatically.

How much does POPmoney cost?
Sending money via POPmoney costs only $1.00 per transaction.

How do I sign up for POPmoney?
POPmoney is available to customers through the FHB Online service and can be accessed via the "Send Money" tab within the "Transfers" section. If you are not currently enrolled for FHB Online, visit www.fhb.com and click on the Online Banking "Enroll" button in the upper left-hand corner of the screen. If you are already enrolled for FHB Online, sign onto FHB Online, go to the Transfers section, and then click on the Send Money (Personal Only) link. Follow the three-step sign-up process:

• Step 1 POPmoney Agreement - Accept the FHB Online POPmoney amendment.
• Step 2 Contact Information - Your email address and mobile phone number are required as part of the sign-up process. You will need to verify the email address we have on file is correct. If it is incorrect, please close the window and click "Update Email Address" within the Customer Service tab to update your email address. After confirming your email address, return to the "Transfers - Send Money (Personal Only)" link and you will also be asked to provide a mobile phone number as part of the sign-up process.
• Step 3 Email/Mobile Phone Validation - We will send verification codes to your email address and mobile phone. Please check your email and your mobile phone for these codes and enter them in the boxes shown on-screen to complete the sign-up process.

Once you've completed the steps above, you will receive a confirmation message indicating that you have successfully signed up for POPmoney. Click "Continue to POPmoney" to start using the service.

Who can I send money to?
You can send money to someone just by knowing their mobile phone number or email address. The person receiving the notification will be able to deposit the money to any personal checking, savings, money market checking, or money market savings account at FHB or nearly any other U.S. bank. You can also send money directly to someone else's bank account if you have their bank routing and account number information.

How does the recipient receive and deposit funds?
If you are sending money to a mobile phone or email address, the recipient will receive a notification with a personalized message indicating that you have sent them a payment. The recipient has two ways of depositing the funds:

• If the recipient is a First Hawaiian Bank customer, they can deposit the funds into their account via the FHB Online service. Upon enrolling, or if the recipient is already enrolled for FHB Online, they can click on the "Send Money (Personal Only)" to access the POPmoney feature. Any payments that have been sent to them will be listed under the "Incoming Payments & Alerts" tab. They can then select an account to which to deposit the funds. They can also designate whether future payments should be automatically deposited to this account.
• If the recipient is a not a First Hawaiian Bank customer, or would like to deposit the funds into a non-FHB account, they can visit www.popmoney.com/FHB. They will be prompted to provide their mobile phone or email address along with their bank account information for the payment to be deposited.

Can I send money internationally?
No, you can only send money to individuals via their accounts within the U.S.

What is the maximum transaction amount I can make via POPmoney?
The maximum daily amount allowed for POPmoney transactions is the current available balance in the source account (plus any available credit in an associated Yes-Check^SM account if applicable) up to the daily limit mentioned below, whichever is less. This includes any single transaction or the total amount outstanding or "in process." For additional information, see below:

Sending Money to Bank Account

Maximum Amount

Daily

$2,000.00

Monthly

$5,000.00

Sending Money to Mobile or Email

Maximum Amount

Daily

$1,000.00

Monthly

$5,000.00

Can I set up recurring or future-dated transactions?
Yes, POPmoney transactions may be scheduled up to 365 days in advance of the date the transaction is to be made. Automatic recurring transactions may also be scheduled for substantially regular intervals (e.g., monthly) in the same amount between the same two accounts. You can schedule recurring transactions to be made weekly, every other week, twice a month, monthly, every four weeks, every other month, quarterly, twice a year, and annually.

How far in advance can I schedule a transaction?
You can schedule a POPmoney transaction up to one year in advance.

When are POPmoney transactions processed?
Transactions will be processed on the date you specify up to a year in advance. Transactions will take approximately three business days to process. Transactions scheduled to process on a weekend or holiday will be processed the previous Business Day.

What is the cut-off time to submit a transaction?
The cut-off time for submitting transactions is 7:00 p.m. HT each Business Day. Transactions submitted after 7:00 p.m. HT or on weekends or holidays will be processed the next Business Day. A Business Day is every calendar day except for Saturdays, Sundays, and bank holidays.

What is the cut-off time to change or delete upcoming transactions?
The cut-off time to change or delete an upcoming transaction is 7:00 p.m. Hawaii Standard Time the previous Business Day prior to the send date.

When does the transaction get debited from my account?
The transaction debit request is initiated on the "send date" but will not post against your account for one to two days.

What happens if I set up a transaction but do not have sufficient funds in my account on the "send date?"
If, on the "send date," there is insufficient balance in your account to make a transaction you authorized, we will delay the transaction and try again on the next Business Day. If there is still insufficient balance to make the transaction, we may either refuse to pay the item, or we may make the transaction and overdraw your account. In either event, you will be responsible for any non-sufficient funds ("NSF") or overdraft charges that may result.

How many people can I add to my list of contacts?
You may add up to a total of 50 contacts.

I used to send money to third parties via the External Transfers function. What will happen to this information?
As part of introducing POPmoney, we have migrated your third-party information and activity from External Transfers to POPmoney. This includes contacts or accounts, as well as upcoming and previous transactions. Categories for previous transactions will not be migrated and will need to be re-defined.

How do I disable POPmoney?
You may disable POPmoney by calling us at 643-4343 (1-888-643-4343 from the Continental U.S., Guam, and CNMI). Please note that disabling POPmoney will also disable your access to External Transfers.

When I logged in to Bank of America's online banking Saturday, I was greeted with a pitch encouraging me to use the bank's new online wire and electronic funds transfer (ACH) capabilities. Consumer online banking can now be used to move money electronically to most anyone in the country. Previously the bank allowed consumers to transfer funds only to their own accounts (funds transfer FAQs), either within Bank of America or at other U.S. financial institutions.

This is a capability offered by many major banks including Citibank, ING Direct and others, often powered by CashEdge. What I almost missed was the more interesting news in the last paragraph:

Beginning this summer, wire transfers will no longer be available in your local banking center... (emphasis added)

I haven't been able to confirm whether this is a nationwide change or something that impacts only certain markets or customers (note 1). On the FatWallet forum a member reported seeing the same message Aug 1 on his account. Another member tested the service and reported that the fees were $3 for a 3-day ACH, $10 for next-day ACH, and "varied" for same-day wires.

The bank's online wire transfer FAQs (for California) still point customers to online banking or their local branch.

What it means: When the nation's largest online bank starts talking about reducing branches and takes steps to eliminate a traditional (and labor-intensive) branch-based service, you have solid evidence that branch banking growth has stalled (note 2). 

Bank of America login message (15 Aug 2009, 1:30 PM Pacific time)

Note:
1. I was served this message when logging in to my business credit card account. When I logged in to my Washington-based checking account (which runs on a different, and much less feature-rich system, than the rest of BofA), I saw no such message.
2. But not everyone agrees. Rob Cox and Antony Currie argue in today's New York Times that the bank branch still has legs, in part because capital market financing has become more expensive, therefore elevating the importance of retail deposit gathering, a branch strength.   

We just completed our latest Online Banking Report. It will be mailed to subscribers this week.
It's also available online here. There's no charge for current subscribers; others may access it immediately
for US$495.

---------------------------------------------------------

Improving Online Account Opening ROI
Ten strategies to increase online application conversion rates

102 pages (published 21 June 2009)

In this report (abstract PDF), we focus on ways to increase conversions and improve your results when opening financial accounts online or over a mobile phone.

The online application is the new branch new-accounts desk. And, just as you provide ongoing support, training and incentives to branch-based sales staff, you must continually fine-tune your online sales process.

In our experience, this is an area that needs attention at most financial institutions. Things have greatly improved during the 10+ years we've been tracking online applications. However, during the research for this report, we reached dead-ends at three of the 10 applications tested (note 1). That just can't happen.

The report outlines a 10-step approach to improving the process: 

• Direct users to the application
• Set expectations
• First things first
• Guide customers
• Bundle mobile access & alerts
• Upsell
• Fund
• Ask for referrals
• Stay in touch
• Humanize the process

We reviewed the online applications of the following companies:

• Bank of America
• BECU (powered by uMonitor)
• Capital One
• Chase Bank
• First Arkansas Bank & Trust (powered by FirstROI)
• Flagstar Bank (powered by uMonitor)
• HSBC Direct
• Huntington Direct (powered by CashEdge)
• M&I Bank
• National City
• Verity Credit Union (powered by Andera)
• Wells Fargo
• Zions Bank

Finally, a 10-year forecast for online account-opening volumes in the United States is presented.

M&I Bank has an attractive and informative application start page (9 June 2009)
Note: The online banking guarantee at the bottom is a good way to improve user trust.

Note:
1. Granted, user error was the problem in two of the three failed apps; however, we weren't purposely trying to make mistakes. The online application should have provided assistance in correcting them, rather than leaving us hanging.

It's isn't often you see one of the companies that we write about make it to the top of Inc. Magazine's list of fastest growing private companies (note 1). But this year, Timonium, MD-based Bill Me Later landed at number six.  

To make it to the top, it takes an amazing amount of growth over a three-year period; in Bill Me Later's case, 87-fold, usually combined with a very small number in the base year ($600,000 in 2003) to top the chart (note 2). 

The self-reported revenue figures for the company are:

2003: $610,000
2006: $53.6 million
3-Year growth: 8,650%
Number of employees: 100

The company's been on a fabulous run and it will be interesting to see how long they stay private. Depending on the credit quality of the company's receivables, it could be an attractive acquisition target for a traditional financial institution or for a certain Web-based payment giant. 

Two other companies we follow made the top 500:

#205: CreditCards.com (Austin, TX) with an amazing $43 million revenues, up 10-fold from its $3.7 million in 2003. With 16 employees, the company does almost $3 million per.

#382: CashEdge (New York, NY) up 7.5 fold from $2.4 million in 2003, to $20.4 million last year, 315 employees. 

Congratulations to this year's high fliers.

Notes:

1. The Inc. list was expanded 10-fold this year to 5,000 companies 

2. The percent-growth rankings are far more dependent on the denominator than the numerator. If Bill Me Later would have had $400,000 less revenue in 2003 they would have grown 268-fold and topped this year's list. However, even $10 million more in 2006 revenues would only push them up one spot. 

The latest entry in the mobile banking space is Geezeo, who unveiled an account aggregation/mobile banking mashup Sunday called Geezeo Mobile. Take a few minutes and watch their screencast (here), which does a good job explaining how it works. Geezeo recently changed its name from DebtFolio and still operates a credit card selector at debtfolio.com. The company also offers a student loan consolidation service, called Geezeo Student.  

 Here's how it Geezeo Mobile works:

1. At the Geezeo website, list the usernames/passwords and challenge answers if necessary, to any credit card or bank account you wish to track (see screenshot below)
2. Register your mobile phone with Geezeo
3. Send a text message to Geezeo, and it will return a text message listing your current balances at all the tracked accounts (see inset)

The account aggregation is powered by CashEdge, which has considerable credibility in the banking industry, but is an unknown with consumers.

Analysis
As much as I personally love this service, it's probably ahead of its time, at least as a standalone product. It's a combination of two little-used services, text message banking + account aggregation, offered by an unknown company. Furthermore, massive security and privacy concerns are barely addressed, and it doesn't work in IE6. But it is a beta offering in its first week, so those things will be fixed. And the mobile service is just a piece of a larger personal finance offering according to the email sent to Geezeo registrants May 13:

Geezeo Mobile and Geezeo Student are part of a much larger online personal finance manager that's soon to be released. Geezeo will feature solutions to help you manage your money, keep track of where your money goes, provide suggestions for improvement, help you meet your financial goals and connect with others.

We have yet to connect with the founders, but according to MobileCrunch, the business model is contextual advertising. If that's true, Geezeo will need to appeal to the youth market, where bank account balances are lower, security concerns are fewer, and texting is the norm. But a better business model might be licensing the tool to banks and credit unions. In one fell swoop, the Geezeo app would give a financial institution a unique mobile banking offering, an entry into account aggregation, and an appealing platform for younger customers.

First reported by Bank Deals today (see note 1), Huntington Bank has recently launched a new direct bank, called DirectHuntington <directhuntington.com>. It goes against the naming convention of having "direct" follow the main brand name, but it shouldn't make too much difference. Still, the bank should secure domain-name rights to HuntingtonDirect.com, currently used by New.net Inc to post a few generic banking links and throw a pop-up or two at unsuspecting users. 

Huntington chose a color palette that makes it stand out from other financial institutions, a good move. However, the yellow 5.30% APR doesn't stand out as well as it should given its importance in the purchase decision (see sceenshot below).

But once again the CashEdge-powered online application leaves a lot to be desired (see previous coverage here and second screenshot below). But before you can even see the application, you must agree to the "Consent for Electronic Disclosure," a terrible first impression for someone who's thinking of sending you ten-grand or more (see screenshot below).

The upper-right Online Guarantee is a nice touch, but it links back to the main Huntington site which might be confusing for users (see screenshot below).

There is no mention of DirectHuntington at Huntington's main website <huntington.com>. However, there's a secret code (anywheresavings) you can enter into the Special Offers box that takes you to the direct banking site. 

*Yet another direct bank

Note:

1. The Bank Deals writer had a relatively uninspiring call with DirectHuntington's customer service when he researched the account. 

As mentioned earlier this week (previous post here), Flushing Financial's new Internet offering iGoBanking features a great price, modern homepage design, visible rates, and an overall good user experience.

At least until prospective customers decide to buy. Once the user clicks the grammatically challenged link, "iGo Open a New Account," things go downhill quickly. The application (see screenshots right and below), hosted by CashEdge (see related post here), fails to maintain the user experience from the bank's homepage.

In fact, the application is a circa 1999 all-text affair that leaves you wondering if the graphic designers at CashEdge are on strike. Here are a few of the problems:   

• No Customer Service or Help on the application
• No telephone number
• No way back to the homepage, the bank's logo is NOT clickable
• Overall lack of design and graphics, even the logo in the top looks like a low-resolution version
• The application steps are hardly visible because the white font is too thin to be easily read through the blue background
• Social security number required on first page
• Application is massive in length for a simple savings account (see screenshots below); we realize the need for regulatory compliance and security, but it should be either shortened or broken into smaller steps to maintain

For more on best practices in application design, refer to Online Banking Report (#104).

Screenshot: iGoBanking application page 2 (click to enlarge)

I had a good chat with CashEdge <cashedge.com> VP Neil Platt at BAI's Retail Delivery last week. The company is busy working on a much-needed channel integration initiative so that account applications begun online can be completed with a phone call or even a branch visit, with no need to start all over from scratch.

The company hopes it can capture half of what it estimates is 70% of completed online applications that go unfunded
(see chart inset).
If that's true, the payback for the solution, at least at larger financial institutions, will likely be measured in months, if not weeks.

Other projects in the works:

• Cross-selling other bank products during the new account-opening process
• Facilitating other types of applications, such as loans
• Improving risk management by tapping additional data sources outside the credit bureau

CashEdge is a great example of a specialist that carves out a profitable niche in a relatively narrow, but risky area of online operations, new account funding. Thanks to big clients such as Citibank, the company is on track to facilitate one million online account openings this year, about a quarter of the estimated 3.5 to 4 million new checking and savings accounts opened this year online (Note: CashEdge estimates). 

The company ranked number 101 in INC Magazine's list of the 500 fastest growing private companies. According to the published figures, the 177-person company grew from just over $1 million in revenues in 2002, to approximately $10 million in 2005.