During 2008, we tracked more than a dozen new PFM launches. But it's been quiet since then. The last major launch was Thrive (now part of Lending Tree) at Finovate 2008. However, with Mint exiting with a $100+ million gain late last year, the space is bound to heat up again. 

It's not like there isn't room for quite a few entrants. The United States supports 15,000 banks and credit unions; there's no reason why there won't be dozens of successful PFMs.

The latest entrant, HelloWallet officially launched today (press release). While its features are similar to others, it has one claim to fame that's tough to beat, an endorsement from a former U.S. president. According to a Sep. 2009 BusinessWeek article, Bill Clinton, singled out HelloWallet in his address to the $20,000-per person Global Initiative event in September.

The for-profit site founded by former Brookings Institute fellow, Matt Fellowes (Brookings archive; inset with Bill Clinton), has attracted the attention of both politicians and foundations with its mission to:

...democratize access to honest, high-quality financial guidance for everyone.

HelloWallet appears to be an advertising-free business model with moderate $5/mo (or $48 annually) fees covering its costs. It's also being distributed free-of-charge through institutional partners such as The Rockefeller Foundation.

The startup has pledged to give away one subscription to a lower-income family for every five paid ones. That's a smart strategy, especially when what is being given has essentially zero marginal cost to deliver. HelloWallet's features include:

• full account aggregation so you can track all your financial accounts from one dashboard
• financial tools for investing, saving, reducing bank fees, and so on
• banking price comparisons
• budgeting tools
• bank-fee and credit-card-APR monitoring services
• goal-based savings

My take: I kicked the tires a bit, successfully setting up automated access to my checking account, and manually adding a few more assets. But the site was a little buggy today, hitting me with error messages and delivering dead links, so I'll hold off judgement until they get things stabilized. But it looks like a well-funded and promising effort so far.

HelloWallet homepage on launch day (8 Mar. 2010)

Note: For more information on the PFM space, see our Online Banking Report on Personal Finance Features.

From a financial innovations standpoint, 2010 is off to a great start. Just 35 days into the year and we've already had two launches of services I don't think anyone saw coming: Blippy to automatically stream your purchases to the world (previous post) and now Kwedit (say it out loud if you don't get it).

Kwedit is designed to be the payments engine for the massive virtual goods market, estimated to be $1.6 billion in 2010 according to InsideVirtualGoods.com, up from $1 billion in 2009 (cited by GamesBeat last week).  

Many of the gaming networks, especially the so-called "social gaming" startups such as Zynga's FarmVille, appeal to teenagers and younger kids (note 1) who don't have credit or debit cards available to pay for virtual goods. This has made it difficult for the publishers to monetize the games through direct payments.

How it works:

1. Users of games partnering with Kwedit can purchase in-game virtual goods by promising to pay later through their associated Kwedit account. See the screenshot below to see how Kwedit is positioned in the online game FooPets.

2. Later, users print out a bar-coded coupon from their Kwedit account (see inset right) and take it to a participating 7-11 convenience store and pay via cash, mail payment directly to Kwedit, or "pass the duck" and send the IOU direct to their parents for payment. The site also offers an option to pay directly via credit or debit card.

3. To help drive off deadbeats, the company has created a Kwedit Score that shows which users are paying their IOUs on time (inset left). At FooPets, users will get more virtual goodies as their Kwedit Score increases, creating a game within the game and a way to promote responsible spending. 

Analysis
I'm not a gamer myself, but as a parent, I understand the pull of online games and look forward to the day when I don't have to hand over my credit card for use on some site I barely understand. Some will argue that Kwedit needlessly encourages credit use in the pre-teen set (note 1). But as long as parents stay involved, Kwedit can actually be used to teach kids the importance of paying their bills.

So, if users take this option seriously, by paying down their virtual debt with real money, Kwedit could be huge (in which case, PayPal buys it of course). And it's relatively low risk for the gaming companies because the virtual goods have a zero marginal cost. BillMyParents is another company we've covered in the teen-payments space.

There is no doubt in my mind that online gaming needs a better payment system and that the solution is unlikely to resemble anything us parents have ever seen or imagined. Kwedit fits that bill. 

Kwedit gets star billing on the main screen at FooPets (4 Feb 2010)

Users create a promise to pay using a popup screen served by Kwedit (link)
Note: Users first must log in to their Kwedit account from this popup

Notes:
1. Kwedit users must be 13 or older to sign up for an account.

I had been intrigued about rumors that Microsoft and Citibank were partnering on a joint personal-finance venture called Bundle. I was hoping for the financial services version of an Apple launch.

OK, that's a little too high of a bar to set. I was really just hoping for the next Mint or at least something we hadn't seen before. To some extent, Bundle delivered, with Mint-like attention to design and deeper data than we've seen previously. But in other ways it's just a me-too personal finance site, FiLife 2.0. Bottom line, Bundle has been open only a week so it's way too early to predict where it's going or how it makes money. 

Bundle is a personal finance startup backed by Citibank, Microsoft, and Morningstar. Two of the key execs, including CEO Jaidev Shergill, are from Citi Growth Ventures, the group charged with commercializing products and ideas that have bubbled up within the banking giant. The startup also enlisted professional journalists, including Janet Paskin who's written for Dow Jones's SmartMoney Magazine among others.

Given that pedigree, the new site is kind of a SmartMoney Magazine meets your credit card statement with some social networking thrown in the mix.  

What distinguishes it from most personal finance content providers is that Bundle showcases proprietary data, sourced from Citibank's massive card-spending warehouse. The site gives center stage to data and shows household spending personalized to your specific location.

There's also professional personal finance advice mixed with stories and comment from the community. Even the articles use the database to illustrate points (screenshot 3). 

Naturally, it's well-integrated to Facebook. You cannot even comment unless you log in via Facebook Connect. You can follow Bundle on Twitter, of course, but surprisingly there is no blog or RSS feed.

And Bundle already has its own iPhone app called Vice Tracker (iTunes link) that makes shopping for non-essentials into a tongue-in-cheek game. The unique app was added to the store two weeks ago in the Lifestyle category. 

According to the FAQs, Bundle's business model is advertising, but there are no ads on the site yet, other than the logos of the backers (Microsoft is using its MSN Money brand). Presumably, they are looking for financial advertisers, but the Citibank connection might make that a harder sell.

Analysis
I like what Bundle is doing, creating a consumer-facing company around Citibank's cardholder data. But I can't figure out who they are targeting. Maybe they haven't decided yet.

If they want to attract data junkies like myself, the data needs to be more transparent and they need more robust tools to play with it. I enjoyed being able to compare the spending of my Seattle neighbors against that of my home town in Iowa (it's surprisingly similar). But I was left with a number of questions: 

• Where does the spending data come from? The FAQs are vague on saying that it comes from Citibank card data, government sources and "other third parties." 
• If it's primarily Citibank card data, is it really representative of the entire town or just the people that hold Citibank cards? For example, Bundle tells me (screenshot #3)  that the average dining out expense in Seattle is $115 and the most common spot is Starbucks followed by McDonalds. Something seems wrong with that.  
• And furthermore, are these estimates of all spending or just that on Citibank cards? And which Citi portfolios are included? What about business cards?
• The graphical bubbles are nice, but I like to view data in tables, especially when trying to drill down and do meaningful analysis. Is there some way to see the underlying numbers?

On the other hand, if Bundle is trying to attract readers looking for personal finance advice and discussion, the data is kind of in the way, more window dressing than anything else.

Final thoughts
The graphics are great and the spending data is interesting. But why would I come back? There's only so many times in one's life that you want to compare the shopping habits of your city vs. somewhere else.

Presumably, future versions will allow you to compare your actual spending to the Bundle averages using account-aggregation technology. This is a popular feature of Wesabe, and is one of the major tenets of what we've called "social personal finance" (note 1, 2).

I also expect they'll integrate Bundle into the Citibank cardholder site so its customers can do online comparisons while they are checking their statement online.  If Citi can document a spending lift from bundled Bundle, then the startup has proven its value. Armed with that success, it could be licensed to other big card issuers, increasing the value of the Bundle data for all users, attracting more users and more advertisers. The network effect. Perhaps that's the end game here. 

#1: Main Bundle page after selecting "Seattle" as location to show spending (29 Jan. 2010)

#2: Main page after drilling down through the "Food & Drink" bubble (link)
Note: Top five restaurants for dining out in Seattle are Starbucks, McDonalds, Subway, Red Robin and Cheesecake Factory. That sounds possible, but then the average purchase size is listed at $115. That's a lot of lattes or Big Macs.

#3: The ever-present "spending balls" hover above an article by Bundle Managing Editor Janet Paskin's short post. The balls compare the spending in Brooklyn with her hometown Seattle 
Note: Brooklyn comes out cheaper, see the solid circles (Brooklyn) in front of the cross-hatched ones (Seattle).

Notes:
1. See our previous reports on Social Personal Finance (2007) and Online Investment Communities (2008).
2. Wesabe would seem to be a great acquisition if Bundle wants to add the aggregation technology piece and jump-start its user base.  Blippy-like features would also make the site more sticky.
3. For more background on the software tools being used, see the article on Bundle in Microsoft's Financial Services publication published 22 Nov. 2009.

Blippy has been one of the more controversial financial entrants in the past few years. Observers have called it the "end of privacy as we know it," a way to take "oversharing to a dizzying new level," and a "great tool for phishers." And those are just the people who like it.

Blippy, a kind of Twitter meets Yodlee service, allows users to stream their purchase activity to the startup's website. Users can choose to publish data from credit and debit cards, bank accounts, and/or directly from purchase activity at ecommerce-partners sites (see list below). It's the ecommerce transaction stream that provides the richest data describing the actual product purchased or rented rather than just a dollar total.

For example, here's an entry from @Julia who's connected her Amazon account directly to Blippy (note 1)  As you can see the Amazon purchases are shown in detail and one of the items, a giraffe teether, has elicited a question/comment from a friend (highlighting ours):

In comparison, credit card transactions list only the merchant name and not what was purchased. However, Blippy allows users to annotate their transactions to add that detail, as you can see in the following entry. 

One of the most common ways Blippy is used is to stream media consumption via iTunes and Netflix. Here are the three Netflix movies on their way to @crobertsjr:

The Palo Alto-based startup received a $1.6 million angel round in January 2010 from Ron Conway, Jason Calacanis, Twitter's Evan Williams, Sequoia Capital, Charles River Ventures, and others. 

How it works
I got my first taste of Blippy after it opened to the public on Jan. 14. It's simple to get started, calling for just an email address, screenname and password. You also have the option of finding friends using your email address book or choosing from a list of 13 suggested people including Blippy founder Philip Kaplan (@PUD) and interstar Jason Calacanis (@jason).

But you don't even need to register for Blippy to see it in action. There's a live stream on the homepage that anyone can watch (see screenshot below). If Blippy follows the Twitter/Facebook model, they will soon have an API available that will let outside developers tap the data stream.

Usage stats

• Number of beta users: More than 5,000 who streamed $4.5 million worth of transactions
• Most-streamed merchant: Netflix with 54,000 entries
• Most prolific spender (that I ran across): Foo Bar (@foo), who does not identify himself other than CEO at a gaming startup, has linked his business credit card and streamed more than 350 purchases worth more than $300,000 (he's a big online advertiser at Google, MySpace, Facebook).
• Most-followed user: Leo Laporte (@leolaporte), from the Premiere Radio Network, with more than 2,600 followers

Features/benefits

Data sharing within workgroups:

• Ability to share financial transactions within a family, a workgroup, or small business. It would be a great way for financial gatekeepers, e.g., the bookkeeper, CFO, or even board members/investors to keep tabs on company spending (see @foo above).
• Ability to annotate expense streams. Users can add short descriptions to expense items so their followers can see the specifics.
• Ability to discuss/comment on expense items. For example, CFO can ask "why did our Google AdWords expense spike yesterday?" and anyone in the group can comment back with an answer or speculation. We use Yammer in our company for this type of back and forth. 

Product research/social networking:

• Ability to find other customers of the same store
• Ability to discuss product or media purchases with friends or strangers
• Ability to post positive/negative info about purchases (yours or others)
• Ability to find previous purchasers of a product you are considering (currently not supported through search)
• Ability to compare how much people paid for a certain item (not currently supported through search)

Personal financial management:

• Ability to annotate expenses for future reporting (e.g., marking taxable items)
• Store transactions free for as long as Blippy keeps the servers running
• Ability to search own transactions

Financial institution opportunities
1. Card companies and banks should create similar sharing functionality for alerts; especially for small business clients. While public posting of purchase data may never have mass appeal, there are many private uses for real-time transaction data.

2. PFM's should be building this functionality now to get out in front of Mint/Intuit who could simply acquire Blippy and incorporate real-time data flow within weeks. 

3. Once the Blippy API becomes available, banks should tap it to allow their customers to use it directly from within online banking.

Analysis
Whether Blippy lives on as a standalone service is difficult to predict. It depends on whether these capabilities are incorporated into other social networks, particularly, Facebook (note 2) and Twitter. And how fast card issuers move to make real-time transaction info easily available to their own customers.

But regardless of where the company nets out, Blippy should be credited with pioneering real-time financial transaction flow, something every financial institution and ecommerce company will support in the coming years. As a result, we are awarding Blippy an OBR Best of the Web award, our first of 2010 and just the third in the past 14 months (note 3, previous winners).   

Blippy Homepage (14 Jan. 2010 7 PM Pacific)

 Optional sign-in to Gmail, Yahoo or AOL to locate friends on Blippy 

Purchases/activity at these merchants can be automatically tracked
Note: 13 ecommerce merchants currently participate (Amazon, Apple iTunes, Audible, Blockbuster, GoDaddy, GroupOn, Netflix, SeamlessWeb, Stubhub, Threadless, Wine Library, Woot, Zappos)

The Blippy real-time transaction stream
Note: You can choose to watch all activity or just that of the people you are following

Notes:
1. If she hadn't given Blippy her Amazon login info and linked only her credit card, there would be no product detail. It would just show as $80.95 spent at Amazon.
2. Blippy is similar to Facebook's ill-fated Beacon service launched in Nov. 2007. The service was quickly toned down, then eventually dismantled, due to the privacy brouhaha that ensued. Blippy is very different because its users are signing up specifically to share purchase info. 
3. OBR Best of the Web awards, from Online Banking Report, are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Blippy is the 76th recipient since we began awarding it in 1997. There were just two winners in 2009.

Syphr's RateMatch system was designed to help credit unions find new members and loan customers. Syphr generates revenue by charging financial institutions when prospective clients click on a link to contact the institution. According to Syphr, the RateMatch engine has processed more than 5,000 reports, with an average loan payment savings of $239 per month.

Syphr's newest innovation is MoreThanACreditReport.com, a credit reporting website with targeted loan information. It's designed to help consumers save by comparing their current loans to those offered by Syphr's affiliated banks and credit unions. Instead of offering just the credit report, the company provides money-saving loan deals. The site launched January 14, 2010 (press release here).

Although the site emphasizes a free credit report, MoreThanACreditReport charges users $14.95/month after a seven-day free trial (see screenshot below; highlighting has been added).

As part of that membership fee, the site's customers get access to other Syphr products including monthly credit monitoring, a credit report every six months, and Syphr's Payment Patrol system, which allows customers to receive notifications of better loan options as interest rates change.

How MoreThanACreditReport.com Works:

1. Consumers register at the MoreThanACreditReport.com site to get their credit report.

2. The site uses the consumer's Zip code to display average loan rates for the local area.

3. Next, using the consumer's credit card information, the site pulls an Experion credit report using a soft pull that does not show as an inquiry on the borrower's credit file.

4. Syphr's RateMatch technology analyzes the user's existing loans and searches for better deals available from affiliated financial institutions in their local area. RateMatch is powered by DataTrac, one of the largest interest rate databases in the United States.

5. The site shows the comparison to the consumer, highlighting where they can save money by refinancing or switching loans. In the example below, Eastern New York FCU is identified as a place that could save the user $60 per month.

If there are no participating financial institutions in the consumer's local area, they are given a RateTrac report, which compares the consumer's loans against the average payment plans offered by loan providers in the area. If the report shows that the consumer is paying more than the local average, the consumer can use the data to help negotiate lower rates.

6. If there are participating lenders available, the website allows consumers to contact the lenders directly simply by clicking on the "exchange it" button. Lenders automatically receive the customer's contact details and credit info.

7. Clicking on an offer on the MoreThanACreditReport site does not constitute a firm offer of credit. The bank or credit union follows up to arrange the actual loan. Because the loan information presented by the website is based on the consumer's credit report, it is likely to be representative of what the participating bank will offer.

My take: Saving money on loans is one of the key reasons people check their credit reports. Syphr says that more than 175,000 people check their credit reports online each month. As a lead-generation system for financial institutions, MoreThanACreditReport.com has the advantage of putting loan offers in front of consumers at the precise time they are thinking about a new loan. 

The MoreThanACreditReport.com site

RateMatch Offers Loan Savings

Online mortgage startup Home-Account has licensed the refinance.com domain name and today launched a new, free service for people seeking to refinance their homes (press release).

The domain name was formerly that of Homebridge Mortgage Bankers Corporation, which had acquired the name for more than $700,000 in 2005. But in the 2008 mortgage meltdown, Homebridge went out of business and the valuable domain name went unused throughout 2009.

Home-Account is a 2009 Finovate alum (video here and here) specializing in helping consumers navigate the confusing mortgage marketplace. The startup uses an online system to assess a home loan applicant's suitability before they apply. It then provides advice and assistance in finding the best mortgage. The company contracts with mortgage lenders to provide firm price quotes at the end of the process. Lenders pay Home-Account a fixed fee for each mortgage.

The startup has enlisted noted mortgage finance expert Jack Guttenberg, also known as the Mortgage Professor (link) to endorse the service.

How it works:

1. To begin the process, simply enter a Zip code.

2. Complete a three-part online application detailing personal financial info (including social security number), info on existing mortgages, and a short "mortgage personality" quiz to help match buyer needs with mortgage options (e.g., fixed vs. variable rate).

3. Confirm identity using info from credit files.

4. Home-Account then pulls a credit report using a soft pull that does not show as an inquiry on the borrower's credit file.

5. The site provides a loan-eligibility score, a few quick tips on improving credit qualifications, and firm loan offers including rates and all fees from qualified lenders. The borrower reviews the various offers side-by-side, a feature that should provoke healthy competition among the lenders.

6. If the borrower decides to move forward, they click on their desired loan to lock in the offered rate.

7. The selected lender then closes the loan directly with the borrower.

At launch, several lenders are offering loans through the system including: GoodMortgage.com, RoundPoint Mortgage Company, Eagle National Bank and First Choice Funding.

Analysis: The mortgage shopping and refinance process is still a mystery to a large percentage of consumers. It is difficult to compare prices while shopping, and the myriad of fees tacked on during the process can leave a bad taste with the borrower. Consumers rarely know if they truly received a fair deal when all is said and done. The Home-Account/Refinance.com solution promises to add more transparency during the entire mortgage process. That's welcome news to scandal-weary American consumers.

However, convincing skeptical consumers to trust its mortgage-recommendation engine will be a major challenge for Home-Account. Third-party endorsements, and possible integration with financial institutions or personal finance tool providers, will be vitally important.

Refinance.com #1 - The site grades loan eligibility ...

Refinance.com #2 - ... and suggest ways to improve it.

Would you like your bank statement to be more interactive? Cardlytics is betting you would. The company's patent-pending technology allows merchants to present their customers with rewards and incentives for shopping with existing bankcards, without needing extra coupons or promotional codes.

But the clever part is that the incentives are placed directly in the customer's online bank statement. The consumer can activate an offer by clicking on it and then using their card at the merchant. No coupons necessary.

Here's how it works:

(1) Bank clients log into online banking. The bank statement includes special offers based on the client's previous spending. As shown below, offers are presented next to the transaction record:

(2) To get more information, users click the expand link.

(3) After seeing the full offer, users can choose to accept it or get more information. Accepting the offer activates the promotional deal.

(4) Once the promotion has been activated, the cardholder simply uses the associated debit or credit card at the merchant. The reward dollars are then automatically credited to the account. Nothing needs to be printed or carried to the store.

(5) Qualifying transactions are instantly confirmed in the consumers' online banking statement.

Analysis:The Cardlytics system is a useful tool for banks seeking to develop incentive programs. According to Cardlytics CEO Scott Grimes, consumers in the current economy are no longer buying into the "pay for it later" mentality fostered by credit cards, making this the perfect time for banks to provide debit card incentives. Merchants fund the rewards in exchange for the highly targeted advertising.

The appeal for the merchants is obvious. They are able to make highly targeted offers directly to customers of their competitors. In the example above, McDonald's places its famous Golden Arches in front of a Burger King customer. That's a definite score.

As a result, more than 50 national retailers have signed up for the platform.

One cautionary note: Will Burger King customers feel they've been sold off to McDonalds by their banks? It's a real concern. Customer education will be important so that consumers understand that no personally identifiable information is being released to advertisers.

The ultimate test for Cardlytics will come from the consumer. Will the Cardlytics program increase bankcard use? It might if the deals are attractive enough to change behavior. So far, the company reports positive results, with an average response rate of 15% and some going as high as 40%.

I'll be watching my bank statement.

I love startups. Just when you think you've seen everything, along comes someone doing something that no one would have ever thought of five years ago, or in this case one year ago.

The latest inspiration: Blippy. The service allows you to automatically broadcast your credit or debit card purchases using the Twitter/Facebook model (see screenshot below; note 1).

The first question everyone asks is why? (see comments at TechCrunch) But really, it's not much different than broadcasting personal details via Twitter or your whereabouts via Foursquare, especially if you limit viewing to friends. The founder, serial entrepreneur, Philip Kaplan explains in the TechCrunch interview, that he has one credit card for "social purchases" broadcast on Blippy and another for purchases he prefers to keep private.

Blippy will contain privacy controls that allow users to share everything or keep it within a closed loop of friends. The company also envisions many other privacy controls to turn the service off and on, allow users to approve transactions before publishing, suppress certain merchants, or merchant categories, and so on.

The use cases shown so far are centered around media purchases, for example using it to automatically tweet (blip?) what song or movie you bought on iTunes or social "check ins" where the service lets people know you just bought coffee at Starbucks. But I can see where it would be helpful for spouses to "broadcast" purchases only to each other. Or for a salesperson to broadcast their purchases to their assistant to build expense reports on the fly. 

The service is in closed alpha (only in use by a handful of friends and family, note 2) as the three-person company gears up for a launch. You can follow Kaplan on Twitter (@pud) for more info.

My take: I like the idea of easily sharing purchases with joint-account holders or a bookkeeper. But many (most?) online banking systems and PFMs already allow this through the alerts system. You may want to boost education efforts on this capability.

As for Tweeting about songs downloaded via iTunes, wouldn't most users prefer to maintain more control over that by simply using Twitter or Facebook to directly type a short note? But we know from experience, if there's a way to do something with less effort, it stands a good chance of succeeding.  

I'm not expecting widespread adoption any time soon, but I think there is a market for sharing spending transactions.

Here's something for innovative FIs to consider: Add a "share this" button next to credit/debit card transaction and let users send the info via email, Twitter or Facebook with a couple keystrokes (see inset from FiLife).

I know it sounds far-fetched, but it might be just the thing to make your card stand out with heavy users of social media.

Blippy homepage showing spending stream (16 Dec. 2009)

Note:
1. For more info in Twitter, see our Online Banking Report on the technology published in May.
2. Twitter's Evan Williams is using Blippy as shown in screenshot taken by CNET's Rafe Needleman in his article earlier this week.

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.

With growing debit card usage, and few rewards programs with meaningful payment bonuses (note 1), the market seems right for a focused debit-card-rewards provider.

But the market has not evolved as fast as many thought. Capital One threw in the towel on its decoupled debit rewards program. Finovate alum (video here) Tempo Payments is refocusing on affinity-branded cards, which often have a reward component paid for by the affinity partner.

But a new entrant, PerkStreet Financial (powered by The Bancorp Bank) may have the right answer: reward levels on par with credit-card programs, 1% of spending value, 4x the average debit card program (note 1). The company emphasizes rewards paid via free coffee (nice tie-in to the name), music downloads (going after the youth market), or gift cards from name-brand retailers (adds retail interest to the account). See the first screenshot.

But with lower interchange, and no monthly fee (note 2), how can a bank afford such high rewards?

• No branches
• Rewards paid out on retail stored-value cards which are provided to the bank by retailers at prices less than face value
• $30 overdraft charges (but it's OPT-IN optional)

$50 new-account bonus: If you navigate directly to the website, there is no new account bonus (see screenshot 2). But if you use Google, it's hard to miss PerkStreet's ad (screenshot 3) or the affiliate deals. Going to the site through those options earns you a $50 bonus (screenshot 4), and in the case of the Google ad, an additional $50 qualified satisfaction guarantee (screenshot 5). 

1. PerkStreet perks page (link; 2 Dec 2009)

2. Standard homepage with no offer, emphasizing free

3. Google search for "PerkStreet Financial" (2 Dec 2009, 5:30 PM Pacific from Seattle IP address)

4. PerkStreet homepage accessed via affiliate (Doughroller link)
$50 bonus with $25 opening deposit and three months of activity

5. Landing page offer (link, 2 Dec 2009)
$50 bonus now with direct deposit, and $50 more if not satisfied within eight months.
To qualify as not satisfied, you must have set up direct deposit within 60 days of account opening, made 10 or more debit transactions per month for six straight months, and have closed your account within eight months of opening.

Notes:
1. According to the fine print disclosures on PerkStreet's homepage, 17% of debit cards provide rewards with an average value of 0.23% of spending (source cited: BAI/Hitachi 2008 Study of Consumer Payment Preferences).
2. The account has a monthly fee ($4.50) only if there is no activity.

Really, we weren't looking for ways to plug our Finovate conference. Usually we just come right out and tell you to register now since it's only 10 days away. But imagine our delight when we opened up the latest issue of Fast Company (Oct 2009) and Dan Macsai's article included six Finovate companies in his list of eight startups "brimming with hope for the financial industry" (see screenshot below; note 1).

In Dan's words, these companies are noteworthy as:

Web-based financial startups creating services that embrace transparency (even in their largely fee-based pricing) and improve the customer experience.

Congratulations to the eight winners (in order of their appearance in the article): 

• Tempo Payments: Decoupled debit (FinovateStartup 2009 alum, video)
• BancVue: Community bank rewards checking and Kasasa national brand (upcoming Finovate 2009 presenter; FinovateStartup 2008 alum and Best of Show winner, video)
• MarketRiders: Impartial mutual fund advice for $9.95/mo
• Mpower Ventures: Providing financial services to the world's unbanked.
• SecondMarket: Helps companies auction securities and other illiquid assets (FinovateStartup 2009 alum, video)
• BrightScope: Independent advice for 401k plan participants (upcoming Finovate 2009 presenter)
• Jwaala: Personal financial management and online banking tools for small and mid-size financial institutions (Finovate 2007 charter presenter, video; FinovateStartup 2008 alum and Best of Show winner video; 2009 Finovate Startup alum, video)
• The Receivables Exchange: Real-time auctions for accounts receivables (FinovateStartup 2009 alum, video)

Fast Company's NextFinance column (Oct 2009, pp. 76-78, ad page omitted)

Note:
1. We'll take a .750 batting average any time. But, we'll also try to recruit MarketRiders and Mpower to future Finovate events.

Last September, six online personal finance managers launched in a single month (previous post). Since then, just a handful of new PFMS have appeared online. Most newcomers have instead chosen the iPhone where more than 1,000 finance apps have launched in the past 12 months.

The iPhone is great for on-the-go transaction processing, but most PFM users will still do their heavy lifting at their computer, setting budgets, tracking expenses, planning for the future, preparing tax returns and so on. So the online venue is still the key competitive battleground. 

Two new online efforts have come to my attention in recent weeks. We'll look at them in more detail later this year (see note 1). 

• Cashflow INSITE, from Neuralus. The Winnipeg, Canada-based startup is looking to partner with banks and credit unions to deliver the PFM. The company is also targeting the financial advisor market where they have a number of independent advisors paying a flat fee (currently under $100/mo) to support up to 100 clients on the Cashflow INSITE platform. 
• PocketSmith, a New Zealand-based firm which launched its beta last year, uses the popular calendar approach to tracking personal cash flow and appears to be gaining some traction in the United States. It's monthly unique U.S. visitor total in July was more than 8,000 according to Compete (see chart below). That puts it at number 13 of the busiest online PFMs in the U.S. according to estimates from Compete (note 2). It's also the highest ranked newcomer to the chart and the non-US PFM with the most U.S. traffic.

PocketSmith monthly traffic estimates from Compete
Monthly unique visitors Aug. 2008 through July 2009

Cashflow INSITE homepage (21 Aug 2009)

PocketSmith homepage (21 Aug 2009)

Notes:
1. We covered the personal financial management space several times in Online Banking Report, most recently: Personal Finance Features for Online Banking; Social Personal Finance; and Online Investing Communities.
2. See the current issue of Online Banking Report: 2010 Planning Guide, for the U.S. traffic estimates for 28 online PFMs.

Usually, it's the big ideas that get all the press. Last week alone, Microsoft launched a new search engine (Bing), Google announced a new way to communicate (Google Wave), and Facebook began rolling out an alt-payment service to its 200 million users. 

Those have intriguing long-term ramifications, but can they save you money today? 

Here's something a little more pragmatic: A tool that promises to make it easy to challenge your tax assessment, potentially saving hundreds or thousands of dollars annually. Enter LowerMyAssessment.com (LMA).

I saw a few screenshots of the service during the company's application to debut at FinovateStartup 2009 last month (demo video here). But I couldn't use the service until a few weeks ago.

How it works
Consumers visiting LMA can use the website's free tool to check their home's value against current market estimates. LMA taps public databases to determine tax-assessed values and calculates market value from various third-party sources such as Zillow.

The company then makes the simple math calculation and informs users if the value of their home is under the tax-assessed value. If it is, LMA provides forms and instructions to challenge tax assessments with the local assessor's office.

In our test case, using an address in Seattle, one of 10 states currently served by LMA, we were told that its assessed value was $300,000 more than the market value (note 2). LMA encouraged me to register and let them help me challenge that assessment.

Registered users complete an online form with info needed to challenge their assessment (see screenshot 3 below). After completing that form, users must pay $125 to complete the challenge process and receive their FairValue Report (shown above).  

Analysis
While the cost-saving potential is significant, the challenge for LMA is getting consumers to shell out $125 for something they can conceivably do themselves (note 3). It took us just a few minutes using Google to uncover the challenge forms and procedures at the King County website. And market value estimates can be pulled from Zillow and its competitors.   

To reduce sticker shock, the company recently removed the big $125 price tag from its homepage (see screenshot 1) and is now emphasizing the free lookup feature (screenshot 2). I can understand downplaying a three-figure fee, especially online. But now they've gone too far the other way. I cannot find the price of the service anywhere on the website. It wasn't disclosed until I completed my registration and filled out the challenge form (see screenshot 4 below).

There's also the small matter of getting the word out. The major market opportunity will largely be gone once home prices get back to their pre-recession levels, even though there will always be cases where consumers feel their assessment is unfair. But LMA needs to team with major financial or real estate firms as soon as possible to reach large groups of potential customers. 

Bank and credit union opportunities
As discussed in previous posts, direct fee income is scarce in online banking, at least in the United States. Aside from credit bureau monitoring, there are few up-front fees that consumers are willing to pay. Certainly, banks earn billions from the underlying checking, debit, and credit card accounts, but nothing from the value added online.

It's possible the service could be replicated by a bank or mortgage provider using available APIs from Zillow or others. But for most banks, it would be far simpler to outsource the service to LMA or other specialists.

If the service were sold for $100+, with revenue shared 50/50, a bank or credit union could earn a respectable profit while providing a unique and free service to customers; however, the folks at City Hall may not be so appreciative. If city government is a big customer, you might tread carefully here.

1. New LowerMyAssessment homepage emphasizes free (2 June 2009)

2. Previous homepage disclosed the substantial fee up-front (12 May 2009)

3. Online appeal form for King County Washington (2 June 2009)

4. $125 (+tax) fee is not disclosed until checkout (2 June 2009)

Notes:
1. States currently covered: Arizona, Florida, Hawaii, Illinois, Indiana, New Jersey, Ohio, Oregon, Washington
2. That was on May 11. Now, three weeks later, LMA shows the house having declined another 20%. Home prices are certainly fluctuating, but not that much. It appears that LMA has switched to using Zillow's low estimate instead of the mid-range one. That may help sell more services, but it's a bit misleading. It would be much better to show the range of potential market values pulling data from all three third-party valuation sites, in much the way RedFin does. 
3. They also have some work to do in clarifying the buying process. It's not really clear exactly what you are buying at checkout. Are you submitting a property-tax challenge at that point? What about the FairValue Report? When do you see that? But we'll cut them slack on that since they just launched a few weeks ago.

I've mostly just observed the Twitter phenomenon, following a few people and seeing how banks and credit unions are using it (see my previous post for financial institutions on Twitter). However, I'd not fully embraced Twitter either as a publishing device or research source. The 300 or so RSS feeds, emails and news items that cross my desk each day seemed like plenty of intelligence to sift through.

But now, I'm reconsidering my priorities after learning about an interesting new alt-payment company BillMyParents from Twitter activity (see notes 1, 2).

How it works: BillMyParents is a new service from IdeaEdge's Socialwise (press release). The service is primarily designed for kids to shop online. They select what they want, then at checkout, redirect the bill to their parents via an email alert to PC or mobile phone. Parents login and complete the payment process at their convenience using MasterCard, Visa, Discover Card (no American Express; see third screenshot below). Card info can be stored for one-click future approvals.

The company charges a $0.50 transaction fee for each purchase. But like PayPal, the real money will be made when the company pushes purchase transactions through the ACH system.  

Currently, BillMyParents is selling prepaid gift cards from its site as a proof-of-concept. I tested it yesterday and everything seemed to work as described (see second screenshot below).

The opportunity: The service reminds me of the unmet need that PayPal filled nine years ago. Purchasing at eBay was a major hassle due to the lack of online payment capabilities. Kids have similar problems when trying to buy things online.

The service could also be adapted to other situations where one party does the shopping but wants someone else to authorize payment such as small businesses, nannies, or even spouses. It could also be used for extra security when the shopping is done in a non-secure environment such as public terminal and payment is redirected to a more secure device, such as your mobile phone.

Like any alternative payment, BillMyParents requires the merchant to add the option to its ecommerce platform and consumers to set up accounts. Both of those are time-consuming and face the chicken-and-egg dilemma, i.e., it's hard to attract merchants without a substantial user base while its difficult to add users without merchants.

Bottom line: This is a winning idea. The massive discretionary purchasing power of teens and pre-teens is a tempting target in this difficult retail environment. And financial institutions, or their payment partners (e.g. Visa, MasterCard), looking to differentiate themselves with the youth market, could jumpstart the program. Or more likely, PayPal and/or Amazon will dive in, either acquiring BillMyParents outright, or building their own version(s).  

BillMyParents homepage after setting up an account (26 March 2009)
Note: Split login screen for kids (left) and parents (right)

Proof-of-concept: Gift card purchase (26 March 2009)

Parent's approval screen (26 March 2009)

Notes:
1.  Thanks to Frederic Baud (@fredericbaud) who was the first in my network to Tweet about BillMyParents; and to Glenbrook's Scott Loftesness (@sjl) who's retweet is actually what caught my eye.

2. BillMyParents appears to have grabbed its Twitter page name (@billmyparents), but it's not yet active.

To give you an idea of the types of innovations being funded in financial services these days, here's a capsule description of the first 48 companies demoing at FinovateStartup April 28 in San Francisco (note 1).

Attention attendees: You have just one day left to register (here) at the discounted price of $795. 

Finovate Startup 2009 Participants

Acculynk
Acculynk is a payments solutions provider with a suite of software-only services that secure online transactions by utilizing a graphical, scrambling PIN-pad for the secure entry of sensitive cardholder information.

AlphaClone
AlphaClone is a web-based investment research service that lets users explore the investing ideas of top hedge fund and institutional money managers.

Aradiom
Aradiom is a mobile solutions provider and designer of Java mobile applications and platform development technology including turn-key applications, embedded soft-token security solutions and BlackBerry® enterprise applications.

BillShrink
BillShrink is a personalized savings advisor that helps consumers make smart, money-saving decisions by providing continuously updated, personalized, usage-based recommendations on everyday services like credit cards and cell phone plans

BudgetTracker
BudgetTracker is a personal finance manager that allows users to manage their finances and keep track of their budget, bills, and transactions online without having to install software.

CalendarBudget
CalendarBudget is a free online personal budgeting tool that helps users organize and track their finances, plan future spending and save money.

Centrro
Centrro is a financial search engine that allows consumers to anonymously shop for personal financial products that best fit their specific credit profile.

CircleUp
CircleUp provides group communications services, which enable actionable and efficient interactions across diverse social, email, mobile, messaging and private web networks.

Cooler Inc.
Cooler Inc. enables users to know, decrease, and offset the global warming impact of their everyday purchases and activities by using the country's only peer-reviewed carbon calculator to calculate impact and then providing reductions targets and strategies, and offering recommendations on high quality carbon offsets.

CreditArray
CreditArray is a vault of proprietary information to allow consumers to better apply for and manage their credit portfolios.

Credit Karma
Credit Karma provides consumers free access to their credit score and offers credit simulators, advice, and credit score comparison tools in order to allow them to more actively manage their credit and financial health.

GoalSpring
GoalSpring's product, DebtGoal, makes paying down debt as easy and efficient as possible by taking into account all of a customer's debt and helping them organize, optimize and pay it down.

Expensify
Expensify simplifies keeping track of business expenses by combining an electronic payment card and a web-based expense manager to automate expense report preparation, approval, and reimbursement.

Green Sherpa
Green Sherpa offers personal cash flow management software that lets users conveniently download, manage and update all their financial accounts via a single online resource.

Home-Account
Home-Account is in stealth mode at this time. 

HomeATM
HomeATM provides a secure PIN debit and PIN credit card transactions method via the Internet that utilizes the HomeATM swipe pad technology to allow users to conduct secure PIN-based transactions from home, ensuring virtually zero fraud and lower merchant processing fee costs.

iBearSoft
iBearSoft is the creator of iBearMoney, a personal finance application for the iPhone that allows users to input and categorize their transactions, run financial reports, analyze payments, and keep track of expenses.

iThryv
iThryv is a financial literacy platform that combines a content delivery system and an incentive system in order to create an immersive learning environment which provides a powerful tool when used in partnership with online banking and core providers.

Jwaala
Jwaala provides software for banks and credit unions that improves their online banking services. Their MoneyTracker application offers a personal financial management solution that can be added to any bank or credit union's existing online banking solution.

kaChing
kaChing is a social investment community that applies an open source and social-networking strategy to offer every investor the opportunity to find outstanding investors, emulate their portfolios, and access the returns, insights, transparency and talent previously only available to wealthy individuals.

Kapitall
Kapitall is a rich web application that aims to make investing easy for everyone. Inspired by game design, Kapitall combines an graphical user interface with tools that make it easier than ever to research companies, build portfolios, share ideas and get smarter about the market.

Lending Club
Lending Club is an online social lending network where people can borrow and invest money at attractive rates.

LendingKarma
LendingKarma is a person-to-person lending site that makes it easy for parties that know each other to create loans and provides borrowers and lenders with tools to help service the loan and see it through to repayment.

Looniesdesk.com
Looniesdesk.com enables people to manage their finances online using an open source financial platform that allows developers to build sophisticated applications which will help users enhance their experience and increase the efficiency of the service.

Mint
Mint is an online personal finance service that securely downloads users' financial transactions, allows them to categorize their transactions, provides a unified view of all account activity and relevant account alerts, and offers personalized suggestions for significant savings opportunities.

Moneta
Moneta provides a secure, quick and easy form of online payment that directly debits users' checking or money market account allowing users to only enter a secure username and password when making online purchases.

NCore
NCore provides enterprise class delivery channel solutions to financial institutions within the Asia Pacific and Middle East regions fusing applications, innovative security and middleware technology into a single integrated platform.

OurCashFlow
OurCashFlow offers personal finance management tools for financial institutions that can turn their website into a place where customers can create a budget, save money and achieve their savings goals.

Pennyminder
Pennyminder helps individuals and small groups manage their shared and personal finances by tracking deposits and withdrawals allowing them to see what's happening with their money

People Capital
People Capital is a peer-to-peer private student loan service that utilizes a unique scoring system to predict a student's potential and provide a true, unbiased measure of the economic value of an education that empowers students to make better educational decisions and offers multiple advantages for both borrowers and lenders.

Pertuity Direct
Pertuity Direct offers social lending for personal loans by bringing together the advantages of capital markets, social networks and traditional banking.

Portfolio Monkey
Portfolio Monkey provides free online portfolio management tools to help average investors optimize their portfolios and find customized investment ideas so they can create more efficient portfolios with higher expected return and less risk.

Prosper
Prosper is a person-to-person lending marketplace where people list and bid on loans using Prosper's online auction platform.

The Receivables Exchange
The Receivables Exchange is a real-time online market for trading accounts receivable that gives businesses access to working capital at a competitive cost by connecting a global network of accredited investors to the nation's small and mid-sized businesses.

Rudder
Rudder is a free personal finance software designed to minimize the effort required in managing money by helping users to manage their budget, track their bills and analyze their expected income and projected expenses.

Silver Tail Systems
Silver Tail Systems provides fraud prevention to defend users' websites against business logic abuse through the use of behavior detection, efficient investigation and real-time mitigation to track suspicious behavior and divert the bad actors, leaving legitimate users unaffected.

SimpliFi
SimpliFi provides independent financial advice online. Users can complete a profile and receive a personal financial plan with specific actionable steps.

SmartHippo
SmartHippo uses the power of the community to find users the best rates on financial products and services.

SmartyPig
SmartyPig is a social saving service that helps users save for a specific goal by allowing them to invite others to contribute to their account, providing incentive boosts from top retailers, and offering a competitive interest rate.

Strands
moneyStrands is a money management service that helps users get information on anything from practical savings tips to getting help tracking expenses down

Syphr
Syphr is a technology and marketing credit union service organization that created RateMatch, a service that matches participating credit unions with the thousands of credit report purchasers per month.

ThreatMetrix
ThreatMetrix helps companies control online fraud and abuse in real time by profiling the device used in an online transaction so companies can determine whether the users are fraudsters or customers.

Transparent Financial Services
Transparent Financial Services is online comparison-shopping service for small businesses that uses technology to help users compare and purchase financial services like payroll processing, credit card processing and business loans.

Victrio
Victrio offers a credit risk management system that uses voiceprint recognition technology to fight credit card fraud and identity theft.

Wesabe
Wesabe is an online personal finance management tool that provides members with information about where they spend and links them with a community dedicated to helping each other make smart financial decisions.

WeSeed
WeSeed seeks to demystify the stock market by helping real people share what they know and make smart investing decisions based on the collective wisdom of the community.   

ZimpleMoney
ZimpleMoney is a web-based financial services platform enabling people and organizations to manage and administer financial agreements including loans, leases, rentals, tithing, trusts and settlements.

Note
1. Several other participants are remaining anonymous for the time being. 

Last month I wrote about Pertuity Direct's impending launch. It's been live for a few weeks, and I've had a chance to review it in detail. The model is so unique, we created an entire special report on the company. It is available to our Online Banking Report All-Access subscribers here. Others can purchase for $195 here. And if you just want the executive summary, read on.

Overview
Pertuity Direct is an amalgamation of two financial services plus a social lending community:

• Mutual fund: Retail investment assets are gathered via the National Retail Fund, an interval mutual fund created by Gemini Fund Services. The fund plans to invest primarily in consumer loans originated by Pertuity Direct (see note 1). At the outset, there are two mutual funds to choose from: one will invest only in loans to prime customers with credit scores of 720 or higher; the other will take on more risk and invest in loans to borrowers with 660 or higher scores. Minimum investment is $250 and current estimated fund expenses are 3.1%.
• Consumer loans: Three-year installment loans of $1,000 to $25,000 will be originated by Pertuity Direct under state licensure. The loans will be sold to The National Retail Fund who will hold them until they pay off. Pertuity Direct will be paid a 1% servicing fee from the fund. Borrowers also pay a 1% to 2% loan fee at funding. The company is currently licensed in 37 states.
• Social lending: The last, and least, piece of the product is a social lending forum, where mutual fund investors can purchase Pertuity Bucks to give to already-funded borrowers to help them repay their loans.

Analysis
Whether this should be called "peer-to-peer lending" is open for debate. Pertuity Direct makes all the loan decisions and sets the rates. Investors have no direct influence over which borrowers are funded. However, there is a social element because investors can donate to borrowers through the community area. The model probably most resembles a member-owned credit union or mutual savings bank.

From an investor's standpoint, it's a unique opportunity to capture banking interest margin without actually buying shares in a commercial bank. The mutual fund is more like a bond, so it should be less volatile than owning equity. Although current estimated management fees of just over 3% are a drag on earnings, the company hopes the percentage falls as the funds gain assets.

However, the mutual fund doesn't have the liquidity or upside of an equity investment. It's an interval fund, meaning they will allow some redemptions each quarter (note 2), but it's not publicly traded. There's also the matter of how they value the underlying assets of the fund. A proprietary model will value the consumer loan portfolio each day, but since the assets are not publicly traded, there is no way to really understand if that model is working until there is a performance history. 

Summary
Pertuity Direct does a credible job weaving these three disparate businesses together and its management team, with experience at PNC Bank and E*Trade, have great ideas on taking this business to the next level. But much remains to be done to educate the market and overcome the hesitancy of jittery investors. We will be following them closely (note 3). 

Screenshot: Pertuity Direct homepage (2 Feb. 2009)
The company posted a 3.5-minute YouTube video of founder Kim Muhota explaining the company's offering.

Notes:
1. While the intention is to invest in Pertuity Direct-initated loans, the funds can also invest in other vehicles.
2. The prospectus says that it will allow 5% to 25% of its funds to be redeemed each quarter.
3. CEO/founder Kim Muhota will be participating in our FinovateStartup 2009, so you'll be able to hear directly from him.
4. For more info on P2P lending, see our Online Banking Report on P2P Lending.

MoBank, the U.K.-based mobile banking and payments said to be launching this month, is creating some buzz on the other side of the Atlantic (stories here, here, and here).  Given the pedigree of its two founders, Steve Townsend and Dominic Keen, who blazed many online banking trails at Egg and First Direct, it should provide a glimpse of the future of mobile finance.

The company is establishing a call center on the Isle of Man, run by Steph Gregg, a veteran of Egg, First Direct and Vodafone. Melanie Hunter is head of marketing, and David Rubin is head of mcommerce.

The company was named to Red Herring's top-100 global start-up list last month (here) along with FinovateStartup alum ClairMail (demo video here).

It appears at launch the service will support bill payment and certain mcommerce activities, such as purchasing movie tickets. An iPhone app is expected at launch. Users will register their credit/debit card(s) with the service. The company plans to expand into mobile banking and money-management activities in the future. 

The company has raised more than $1 million according to news reports. The company was founded in 2006 and presented at The Essential Web conference in June 2007
(p. 43, here) and had four employees at that time.

Here's how the company described itself 18 months ago:

MoBank is creating the world's first mobile-led online bank. The company believes that, for some sections of the population, small screen devices will become the channel of choice for most banking and payment services. moBank's business model is based on providing a free-to-use basic banking service with paid-for add-on features. Furthermore, moBank's users are enabled to participate in a range of unique, value-generating m-retail activities.

What's innovative: It sounds like a mobile-based account aggregation and bill-pay service, similar to Mint on the iPhone. But it could also contract directly with one or more banks like SmartyPig has (previous coverage). But as ING Direct proved, optimizing on a new delivery channel can pay off with great word of mouth and positive press.

MoBank pre-launch homepage (6 Feb. 2009)

Note: For more info on the growing market, see our Online Banking Report on Mobile Banking.

FinovateStartup09, our annual springtime technology event in the San Francisco Bay area, is just three months away. Today, we announced the first wave of young companies committed to participate on April 28.

More companies are in the pipeline, and when all is said and done we expect more than 50 startups to be on hand to demonstrate the latest in online and mobile financial services and technology.

The Finovate format combines fast-paced demos (no PowerPoint!) with extensive networking where you can meet the start-up founders along with influential industry executives, press corps, and analysts. To get a taste for the event, take a look at videos of past demos.

Because we hadn't named any companies until today, we've extended the Super Early Bird registration deadline until this Friday, Feb. 6 (register here). See you in San Francisco.

Finovate Startup 2009 lineup (as of 2 Feb. 2009):

• Acculynk
• Aradiom
• BillShrink
• BudgetTracker
• CalendarBudget
• Centrro
• Cooler Inc.
• CreditArray
• Credit Karma
• GoalSpring
• Expensify
• Green Sherpa
• Home-Account
• iBearSoft
• iThryv
• Jwaala
• kaChing
• Kapitall
• Lending Club
• Looniesdesk.com
• Mint
• Moneta
• NCore
• Pertuity Direct
• Portfolio Monkey
• Prosper
• Receivables Exchange
• Rudder
• Silver Tail Systems
• SimpliFi
• SmartHippo
• SmartyPig
• Strands
• Syphr
• Transparent Financial Services
• Victrio
• Wesabe
• ZimpleMoney

One month ago we announced the 2009 version of our Finovate Startup Conference. Since then, we've been busy talking to FinTech startups from around the world. We are glad (and a bit relieved) to announce that we already have 35 committed to demo at the event. There is still an enormous amount of activity and energy in the banking and financial technology sector (note 1).

We are several months out from the deadline, so we expect in excess of 50 startups, along with several hundred bankers, investors and other industry execs to convene April 28 at the UCSF Mission Bay Conference Center (note 2).

While last year's FinovateStartup was dominated by social-media plays (see logos below), this year we have more diversity, with companies from the following categories:

• Alt payments
• Financial shopping/comparison tools
• Investment management/tools
• Mobile banking & payments
• iPhone/Android applications, personal financial management/tools
• Peer-to-peer lending
• Personal credit management tools
• Other technologies

Participating companies will be named beginning Feb. 1, but you can save by reserving a ticket now.

Super-early-bird prices that are easy on the budget
We've tried to make the conference as affordable as possible recognizing that travel and conference budgets are under constraints. You still have nine days left to snag super-early-bird tickets for $695. Current Online Banking Report subscribers, including anyone in the same company as an existing subscriber, can grab tickets for even less, just $445 each until Jan. 31 (note 3).

Attendees may register here. More information on the event is here.

FinTech companies interested in participating/demoing should email Eric Mattson .

FinovateStartup 2008 presenters (videos of all 2008 demos are here)

Notes:
1. See our post, "Why financial technology still matters," here.
2. The venue is about two miles south of the San Francisco financial district.
3. If you don't know if your company subscribes to Online Banking Report, email info@netbanker.com to find out. If qualified, we'll email your subscriber discount code to you.

Start-up activity in the financial technology sector has slowed dramatically since Sept./October when a dozen online finance startups launched (see previous post), not a surprising development given economic conditions and the time of year. 

Still, a number of companies remain in the pipeline, and yesterday we saw the launch of an entrant into the battered P2P lending space. But ZimpleMoney is not entering into the newly SEC-regulated market occupied by Prosper, Lending Club, Loanio and other hopefuls. Instead, the Costa Mesa, CA-based startup is offering a platform with tools so that third parties can either build lending services on top of it, or use ZimpleMoney's processing capabilities to manage loans and financial transactions.

ZimpleMoney can also be used like Virgin Money USA or LoanBack to handle a single loan amongst friends and family, either for personal or business use. The introductory price for an individual loan is $39 plus $7.99/mo.  

The site, which opened Monday, still looks more like a beta operation. The registration system wasn't fully functional yesterday, and I ran into several broken links today. But minor annoyances aside, it's an interesting development that should help drive social finance forward.

Given Prosper's recent woes, we are not likely to see new Prosper-like P2P exchanges using the ZimpleMoney platform any time soon. But it could be a good way for nonprofits, foundations, or microfinance organizations to launch Web-based loan operations with a minimal amount of development time and expense. Banks, credit unions, and other financial services companies could also private-label the service for their clients.

In his announcement email Monday, CEO (aka ZEO) Steven Rabago said they'd had interest from several nonprofits, a realty company, an investment management company, a student lender, and a large regional bank. Rabago started his career as a commercial banker at Bank of America. He left in 1983 to start National Corporate Finance (now called Archarios). In 2001, he co-founded a location-based services company Telogis, where he remains as a board member.

ZimpleMoney homepage (9 Dec 2008)

Note: For more info on the market, see our Online Banking Report on P2P Lending.

A new financial market will open Monday where businesses as small as $1.5 million in annual sales can borrow against their receivables with prices set in an auction market.

New Orleans-based The Receivables Exchange opens for trades on Monday (17 Nov) after an 18-month development cycle.

Businesses register with the exchange, a process that entails uploading financial statements and completing an application. The Receivables Exchange conducts due diligence on the potential participant to ensure that it is legitimate.

Businesses must meet the following criteria:

• Minimum of $1.5 million in annual sales
• At least 2 years of operating history
• Registered to do business in the United States

Upon approval, the business can list specific invoices for financing, with a minimum total value of $10,000. Then accredited investors (SEC definition here) bid to provide short-term financing until the receivables are collected. Sellers are encouraged to upload PDF copies of invoices, proof of delivery, and so on to get the best rates. However, many documentation requirements are optional.

Sellers select the terms they are willing to accept and the bidder that beats those terms by the widest margin wins the credit. If no bidder meets the minimum terms, the auction ends without a trade.

Co-founders: Justin A. Brownhill and Nicolas R. Perkin

VC backers: Prism VentureWorks LLC and Fidelity Ventures

Analysis
In an era of tight credit, it's a welcome addition to the financing tools available for small and mid-sized businesses. Larger businesses typically have more options through commercial paper and other capital markets.

The startup expects banks to be valuable sources of referrals. Although, at this point, there are no referral fees or revenue-sharing options.

So far, The Receivables Exchange has signed up sellers with a total of $2 billion in annual sales. And there's been a lot of interest. Founder Nicolas Perkin says his company has been approached by 20 $1+ billion companies.

But what about the other side of the trade, the lender/investor? The company says it has access to $8 billion deployable capital. Of course, that doesn't mean that the capital will be easily enticed into actual deals.

Starting Monday, we'll see what the buy side thinks. Are they willing to risk their capital in the unproven market? If The Receivables Exchange can drive out fraud and deliver on its promises, we think the answer will be yes.

The Receivables Exchange homepage (11 Nov 2008)

I've communicated with Privier founder Charles Polanco a number of times over the years. He's a Wachovia alum who's been working on a financial startup for several years. The company launched a suite of payment services on Oct. 16 that aims to get the plastic card out of the ATM business (press release).

Privier's value prop is straightforward and compelling: Enable money transfers from any device at any time with the cash delivered through the worldwide ATM network.

The system initiates transfers in three ways:

• ATMsend: ATM to ATM
• iTransfer: Web to ATM 
• mPayment: Mobile phone to ATM

In Privier's model the ATM card is replaced by a one-time authorization code that recipients key into the ATM to withdraw transferred funds.

Analysis
From a usability perspective, it's a great idea. After all, what's not to like? Consumers need to send cash. ATMs have cash. Why not let folks authorize a remote ATM withdrawal from the comfort of their own home or office. A proposed fee in the $7 range beats most alternatives for long-distance money transfers.

However, from a practical standpoint there are two massive roadblocks to overcome:

• Retrofitting ATMs to accept a keyed-in code instead of a mag stripe for authentication
• Convincing banks to add ATM-transfer capabilities to Web, mobile and telephone services

It will likely take an organization the size of Visa, MasterCard, or Bank of America to pull this off. To ensure that those behemoths work with it, Privier has a portfolio of patents pending on the business process. 

What it means for Netbankers
It may take decades, but eventually, the Web married to mobile will eliminate the plastic debit/credit card; however, unless you are a major bank or payments company, this isn't likely anything you need worry about for a number of years.

A better short-term solution for smaller financial institutions is to enable P2P funds transfers using PayPal so you can send money to anyone with a PayPal account (see note 1).

Privier's Web-based interface for sending cash to an ATM (5 Nov 2008)

Note:
1. See our latest, the Online Banking Report 2009 Planning Guide, for more info on project priorities for this year and beyond. 

Providing free credit scores in exchange for viewing a credit card offer seems like a reasonable value exchange (see note 1). That's why we gave Credit Karma our OBR Best of the Web award in August and why it is on stage next week at Finovate (see previous coverage here, video at Finovate Startup here). 

It's also no surprise that others would try the same model. Credit crisis or not, credit-worthy borrowers are still a valuable commodity. Case in point, Bankaholic's recent acquisition by BankRate for a reported $15 million, or $50 per unique visitor (Mashable post here).

The latest entry in free-credit-score lead generation is KnowBeforeYouApply (KBYA) from Centrro, a financial-search company founded in 2006 by Ike Eze and Tuyen Vo. Eze was a founder of QSpace, an OBR Best of the Web winner in 1997 when it became the first company to make credit reports available online (archived OBR article here). QSpace was acquired by Experian several years later.

KnowBeforeYouApply launched on Sept. 3, but was put on the map with Mr. Eze's post today in The Huffington Post entitled, "Stay Away from Me, Credit Card Crisis" (see note 2). The article discusses the value of tracking your credit score and using that knowledge to find the best credit offers. Eze mentions his company along with Credit Karma, Quizzle from Quicken Loans, two other Finovate presenters, Mint and BillShrink.

Using KnowBeforeYouApply.com
It would be difficult to make the site any easier to use. Customers type in their name, address, email address, and last four digits of their social security number. Apparently, that's all that's needed to access your credit file and return a letter grade of A through F.

The whole process takes about 30 seconds (there is no need to enter an entire social security number), and KBYA steers clear of those pesky out-of-wallet authentication questions. Users can get an update of their credit grade every 90 days. In comparison, Credit Karma, which provides an exact 3-digit credit score, will update it daily if the user so desires.

KBYA also has a simple and intuitive sales platform. Just two offers were highlighted in the main screen, one from Chase and one from American Express (see first screenshot below). However, clicking through to "see all offers" led to 25 pages of credit cards, displayed five to a page (121 total for A-grade credit). A handy index along the sidebar allows users to find various categories that most appeal to them such as "travel rewards" or "0% intro rate" cards (see second screenshot).

KBYA appears to use the API from CardOffers.com to build a portion of its database of card offers. CardOffers.com offers its affiliates up to $20 per application or up to $160 per approved application. KBYA also appears to be an affiliate of Credit.com and Discover Card (see note 3).

The site is focused solely on credit cards for now. But a Home Loan tab is built into the user interface, with a "coming soon" label.

Analysis
All in all, it's a good service. The site needs to beef up its FAQs, About Us, and other educational materials so users can better understand who is behind the service and what exactly the credit grade means. But as a month-old beta service, it's presumably coming.

While I prefer the precision and peace of mind of seeing my actual credit score, a letter grade every 90 days will be sufficient for many users and should help keep costs down. And the speed of the application process and lack of social security number are real benefits.

Financial institution opportunities
Banks, credit unions, and card issuers should consider offering similar functionality both inside online banking, where private info would already be known, and on the outside where prospective loan customers could use it. With info about the customer's credit grade, lenders could deliver tailored offers that could lead to increased application volume and approval rates. See our recent Online Banking Report for more info on lead generation sites (note 1). 

Know Before You Apply main page after login (7 Oct 2008)

KnowBeforeYouApply all-offers page (7 Oct 2008)

Notes:
1. For a thorough discussion of the topic, see our August 2008 Online Banking Report on New Models for Lead Generation.

2. Strangely, the article doesn't specifically disclose Mr. Eze's affiliation with Know Before You Apply, although clicking on his name does show he's CEO of Centrro. However, it's left to the reader to discover on their own that Centrro is the parent of Know Before You Apply. Hopefully, that oversight will be corrected.

3. The affiliate relationships are inferred from the redirects that take place when clicking on the Apply Now arrow.

4. This is one of the ten online finance companies that launched in Sept. (post here).

Add one more company to the list of recent launches: Loanio went live today after a lengthy "coming soon" process (previous coverage here). The thousands of people on its email list received a message this morning announcing the launch (see below). 

Founder Michael Solomon demo'd the product back in April at our Finovate Startup event (video here). Today's live version looks similar to the April build. The key differentiating features of Loanio's product are:

• Ability for anyone to borrow, if they have a creditworthy co-borrower
• Optional enhanced pre-verification process (costs $35 for single borrower, $45 for co-borrower apps) allows borrows to boost their credibility by submitting the following documentation in advance of posting their listing:
  - Photo ID
  - Income documentation
  - Bank account statement
  - Employment documentation
  - Postal address documentation
• Longer loan terms -- up to 5 years compared to P2P lending standard of 36 months
• Borrowers have the option of accepting partial funding of their loan request as long as it's at least 35% funded

Several other tidbits from the FAQs:

• Experian provides the credit info on borrowers
• Lenders pay a 1% service fee on all outstanding loans
• Buyers pay an origination fee as follows, equal to the greater of $95 or:
  -- Loans with one borrower: 2% for A and B credit grades, 3% for all others
  -- Loans with co-borrower: 3% for A, B and 4% for all others
• Borrowers may seek loans of $1,000 to $25,000
• Lenders must put in at least $100 to participate with a minimum bid amount of $50

The first borrower listing appeared on the site within the last hour or so, a C-grade credit seeking $2800 for debt consolidation (see screenshot below, note 1).

Screenshot of Loanio home page with first loan listing (1 Oct 2008)

State coverage limited
At launch, Loanio has gathered licenses to lend in only 22 states (see note 2). However, 10 of those have interest rate caps of 12% or less, so lending will be limited to the highly credit worthy, and one (Minnesota) caps the loan amount at $2550.  Here are the 12 states which Loanio primarily competes in today:

State	Max Interest Rate
Alabama	30%
Georgia	30%
Mississippi	30%
New Mexico	30%
North Carolina	30%
Indiana	21%
West Virginia	18%
Wisconsin	18%
Alaska	16%
Nebraska	16%
New Jersey	16%
New York	16%

These are the 10 states that allow borrowing from Loanio but cap the rate so that only those with excellent credit are likely to receive funding:

State	Max Interest Rate
Tennessee	12.25%
Hawaii	12%
Louisiana	12%
South Carolina	12%
Virginia	12%
Connecticut	12%
Arkansas	11.25%
Delaware	11.25%
Kentucky	10.25%
Pennsylvania	6%
Washington D.C.	6%

As you can see, there is no lending in major population centers of California, Texas, Florida, Illinois, Ohio, Massachusetts and for the most part in Pennsylvania with a 6% rate cap. But there are ways to change that and Loanio can at least get started in 10 states while it fine tunes its business and develops methods for lending in all 50 states. Prosper and Lending Club both originate loans nationally through Webbank before passing them to the individual lenders. This allows nearly full geographic coverage, while usually bypassing state-mandated maximum loan rates.

Loanio joins Prosper, Lending Club, GlobeFunder, Fynanz, GreenNote and Virgin Money in the U.S. P2P lending space (currently, only Prosper, Fynanz, and now Loanio, operate true P2P exchanges). The others are either closed to individual lenders temporarily (Lending Club, GlobeFunder) or require borrowers to find their own funds from friends and family (GreenNote, Virgin Money). For a complete look at the market, see our Online Banking Report on Person-to-Person Lending.

Email: Loanio now open (received 10:39 AM Pacific time 1 Oct 2008)

Note:
1. Unfortunately, this loan is unlikely to be funded due to the max interest rate of 6%, likely because she is a Pennsylvania or Washington DC resident where the rates are capped at 6% (see table).
2. Just about anyone 18 or older can be a lender regardless of where they live. Only South Dakota and Pennsylvania residents are currently ineligible to lend through Loanio.

What a month for financial tech startups! Partly due to DEMOfall, TechCrunch50 and our Finovate, there's been at least 10 online financial service launches or unveilings this month in North America alone (note 1).

That could be the sign of a bubble about to burst, or it could just be a bunch of smart people meeting very real market needs. Only time will tell. 

Lucky number 10 is Pennyminder, an online personal finance startup based in Vancouver, BC. I met founder Vince Hodges at BarCampBankBC last Saturday (coverage here). Although Pennyminder joins a crowded field, the seventh personal finance manager (list below) to launch this month, it's the first ever based out of Canada. That alone should help it gain some traction.

Vince proffered a beta invite, so I've had a chance to look at it. It's a nice, clean design that allows user entries/statement import and supports an expense sharing/social angle. I don't know if that's enough to compete with the dozens of U.S. and international personal finance sites, many with VCs funding a wider range of features, but it's a good start.

Pennyminder will have to figure out a way to break through the clutter, such as partnering with credit unions and/or banks.

Here are six more newcomers this month:

• Thrive unveiled here yesterday and launching at Finovate NYC on Oct. 14
• Rate Surfer unveiled at the TechCrunch50 DemoPit on Sept. 9 and launching at Finovate NYC, Oct. 14 (our coverage here)
• iThryv from Shryk unveiled on stage at TechCrunch50 on Sept. 8 and covered here that day
• Expensify unveiled at the TechCrunch50 DemoPit on Sept. 8 (our coverage here)
• Rudder unveiled here Aug. 23 and launched at DEMOfall on Sept. 8
• GreenSherpa unveiled here July 18 and launched at DEMOfall on Sept. 8

Note:
1. Includes the seven mentioned here plus three more I've yet to blog about.

With three weeks remaining before Finovate NYC, the final company in the demo lineup is stepping out of stealth mode and announcing its participation in our second annual new-products conference. See the full list here.

Thrive will be launching its entry in the online personal finance marketplace, JustThrive.com, at Finovate on Oct. 14. The company hopes to differentiate itself with more advanced financial planning tools while still remaining free. Founder and CEO is Avi Karnani; Marc Matsumoto is CMO.  

Currently, the service is in closed beta testing, but Thrive recently updated its homepage with a timely message playing off last week's financial debacle (screenshot below). 

We had a chance to meet with the NYC-based founders earlier this year and were impressed how they'd studied the current players and were aiming to leapfrog the competition. However, there's been significant innovation in the space this year, and they enter a crowded field (more on that tomorrow).

At this point, I can't say anything more specific about Thrive's plans, but after it becomes publicly available we'll be back with a full analysis. 

Like Rate Surfer, which we wrote about yesterday, Expensify launched its new employee expense-management system from the TechCrunch50 DemoPit this week.

The San Francisco-based startup (note 1) combines a payment card with a Web-based expense manager and uses cellphone cameras to upload pictures of receipts to match against purchases. It's a banking triple play: card, online, and mobile.

The target market is smaller businesses that want to automate expense report preparation, approval, and reimbursement to their employees.  

How it works
The heart of Expensify is a prepaid, decoupled credit card. I know that doesn't make sense, but here's how it works: 

1. Sign up for an Expensify MasterCard prepaid debit card.
2. Load it with value from any credit or debit card, Visa, MasterCard, or American Express. 
3. Make purchases with the Expensify MasterCard.
4. As each purchase clears, the prepaid balance is lowered, triggering an automatic "top off" charge of an equal amount to the consumer's credit card, thereby returning the prepaid balance back to the original level.

Metabank is the issuer; here are terms and conditions.

Analysis
At first blush Expensify sounds pretty amazing. An expense management card that rides on top of your regular card, with mobile and Web-based integration. Brilliant, until you start thinking about costs. There's that pesky thing called interchange. What Expensify has done is create two card transactions instead of one, doubling the amount of interchange paid.

To cover the extra interchange and create some revenue for itself, Expensify levies a 3% transaction fee on the cardholder. Although the card is otherwise relatively fee-free, that's a significant surcharge.

Why would anyone pay 3% extra in order to use the Expensify card when they already have a credit card? The company believes that small businesses will pay the fee in order to get the expense-manager features and to help employees separate business expenses from personal ones. Businesses could have multiple Expensify cards tied to different categories of expenses (see screenshot below).

A business with just $1000/mo in expenditures would pay $360 per year. In addition, the business would tie up several hundred dollars in a prepaid account, because the only charges cardholders can make must not exceed the prepaid balance held in the Expensify account. 

I think the expense-management concept is good, especially with the mobile receipt integration, but it's just too expensive in its current format. The founders should try to move to an ACH-based "topping off" process and remove the transaction fees. 

But regardless of how this specific product performs, the integration of payments, online and mobile, is a huge trend. If Expensify is nimble enough, they may be able to ride the wave.

Expensify homepage (10 Sep 2008)

Note:
1. Since I didn't see contact info on their website, here's what the founders provided at TechCrunch50: Expensify, 548 Market St. #61434, San Francisco, CA 94104, Phone: 801.745.9064

Two huge tech conferences opened today in California with 124 companies launching new products this week in front of a combined audience of more than 2,500 (see note 1). At DEMOfall in San Diego, 72 companies are launching new products today and tomorrow. In San Francisco, 52 companies launch at TechCrunch50 today through Wednesday.

Eight of the 124 companies are related to financial services:

• DEMOfall: Rudder, GreenSherpa, BizEquity (Advanta)
• Techcrunch50: iThryv (below), StockMood, PersonalRIA, exchangeP, and Emerginvest

We'll cover several of these companies, plus several in the TechCrunch50 DemoPit, starting with iThryv.

iThryv kicks of TechCrunch50
I made it down from Seattle this morning just in time to catch the first demo. I'm glad I got up early because it just so happened to be the only personal finance/banking-related finalist. Oklahoma City-based Shryk kicked off TechCrunch50 (note 2) by unveiling its online banking platform aimed at the 12- to 20-year-old crowd. The new service is called iThryv and it will be marketed directly to banks and credit unions who will customize and brand it for their own customer base.

iThryv will be integrated directly to the bank, or its core processor, so that real-time banking data can be displayed in various widgets. In addition to account info, iThryv also includes the following modules and features:

• Goal-oriented savings, including rewards for reaching milestones
• A spending & savings score that does for savings what a credit score does for loans
• Make $ area where budding entrepreneurs can learn more about starting a business
• Learn area for financial education

The company has a two-fold approach to getting iThryv into the market:

• Licensing the platform to banks for a fixed fee plus per-user fees
• Giving the platform to schools to incorporate into their curriculum

According to the founders, the service is currently being considered by several financial institutions, but it is not yet available online.

iThryv homepage (8 Sep 2008)

 iThryv savings score graphed (8 Sep 2008)

iThryv "Make $" tab (8 Sep 2008)

Notes:
1. TechCrunch reported approximately 1,700 attendees; DEMOfall, 800.

2. iThryv was originally scheduled to present third, but were moved up to first when Ashton Kutcher was late for his scheduled demo of his startup, Blah Girls.

"> Last September, we wrote about the launch of Washington D.C.-based Pertuity Direct. At the time, the startup was showing some interesting social-personal finance tools such as Dare to Compare, which allowed users to compare their financial situation to their peers and national norms (see "before" screenshot below). It looked like another online PFM play.

But it turns out the company's true business model is person-to-person lending (aka social or P2P lending) where it will compete with Prosper, Lending Club, Loanio, and others (see note 1). Its URL redirects to a non-functional placeholder page (below) that includes only an email signup (note 2).

Here's the company description of its strategy:

Pertuity Direct is bringing the next generation of social lending to the Web - integrating simplicity, liquidity and automatic diversification into the social lending model.

The founder is Kim Muhota, an ex-banker out of PNC Bank. Pertuity Direct, which is currently closed to the general public, will demo its new product at our October Finovate conference.

Current: Pertuity Direct placeholder page with email signup
(26 Aug 2008)

Before: Pertuity Direct website before redirect put in place
(see note 1, 26 Aug 2008)

Notes:
1. For more on the P2P lending space, see our Online Banking Report on Person-to-Person Lending.

2. You can see the previous website content by following a deeper link available from Google.

Intuit joined the messaging race with the beta release of Quicken Beam. The free service sends users text-messaged balance-and-activity alerts from most U.S. bank, credit card, and credit union accounts. Users may also query the service for balance plus last five transactions by texting "Bal" to the short code 636363.

Currently, the service runs independently of Quicken and can be used by anyone free of charge. According to the official press release, the service was developed in Intuit Labs.

What's innovative
It's not a new feature. Quicken Online (see second screenshot below), along with most major banks and personal finance specialists (Mint, Rudder, Wesabe), already supports text-message alerts (see note 1). But this is a relatively low-cost way to hook users early on with an extremely simple service, then migrate them to more robust Intuit services later on (Quicken, QuickBooks, TurboTax).

And the Quicken stamp of approval means a lot when turning over your log-in credentials to a third party. If you want to talk to the company about Quicken Beam, Intuit will be demo'ing the latest features of Quicken Online at our Finovate Conference in October. 

Financial institutions that lack text-message support might consider linking customers to Quicken Beam. Yes, you are turning customers over to another financial provider, and yes, your compliance folks will hate it. But customers are going to do it whether you want them to or not. You might as well get credit for making a solid recommendation. And realistically, using Quicken Beam is unlikely to hasten anyone's exit from your bank or credit union.

Qucken Beam homepage (25 Aug 2008) 

 Text messaging in Quicken Online (25 Aug 2008)

Notes:
1. Geezeo really differentiated itself with mobile capabilities in its May 2007 launch. 

2. For more information, see our Online Banking Report on Personal Finance Features.

There's a new challenger in the online PFM space, aptly named start-up Rudder which is headquartered in Houston, TX (see note 1). The company was founded in 2007 and launched last year under the name SpendView (note 2).   The company raised $2 million in January from Meakem Becker Venture Capital. The founder is Nikhil Roy. 

What's innovative
While it's a bit busy for my tastes, Rudder's homepage is aesthetically pleasing, and more importantly, lays out a number of remarkable benefits that every financial institution should be able to deliver on:

• Finances in your inbox: emphasizes that it's pushing info to you, not relying on your obsessive monitoring of a website
• Paying bills on time: They don't just help you pay the bills; Rudder makes sure you pay them ON TIME, a huge difference in terms of consumer benefits
• Think forward: Everyone has a sense of what they really have in the bank after upcoming expenses are met, but Rudder actually does the math for you and shows you what's truly "free cash" in your account after accounting for upcoming payments
• Every morning: Rudder provides a personal-finance heads-up each morning so you can go about your day without thinking about your finances
• Safe & secure: Self-explanatory, but cannot be overlooked

Clearly, Rudder has been studying how Mint grabbed an early following with great design, advanced functionality, and a brash point of view. However, it won't be able repeat Mint's PR coup last year of winning at TechCrunch40 and our Finovate 2007 (see note 4). Rudder has scheduled its public debut at competing techfest, Demo Fall, running Sept. 7-9 and unfortunately were not on our radar screen until after the Finovate 2008 lineup was set (note 5).

What it means
You gotta love Web-based startups. It took a decade for Wells Fargo to move from delivering plain old statement info on its website to offering rudimentary personal finance functionality in My Spending Report.

But less than two years after Wesabe (note 2) kicked off the Personal Finance 2.0 era, we have dozens of cool personal finance companies looking to make a name for themselves. Mint (note 2) is the most hyped (see coverage), but there are also great things going on at Geezeo, Jwaala (note 3), Buxfer, ClearCheckbook, Mvelopes, and, of course, Quicken Online, which has Coke-like brand awareness.

And don't rule out the incumbent financial institutions. PNC Bank (post here) and Frost Bank (post here) have both introduced novel accounts that incorporate advanced personal finance functions. And Bank of America has offered full-service PFM functions since late 2006 with Yodlee-powered MyPortfolio.   

Rudder homepage with five key benefits highlighted (21 Aug 2008)

Your "real" balance widget
I love the focus on what you really have in your account, after netting out all the known bills in the coming month. Here's the graphical feedback Rudder provides.

Notes:
1. Rudder seems like a good name for a financial management app. What do you think Jeffry?

2. The previous version, SpendView, is still live at <spendview.org>, but the original spendview.com now redirects to rudder.com.

3. See Wesabe and Mint demo their latest features at the upcoming Finovate 2008. Mint won Best of Show at Finovate 2007.

4. Jwaala was Best of Show winner at Finovate Startup, April 2008.

5. Attention startups: It's never too early to make an introduction and get on our Finovate watch list. We're already putting notes together for 2009. Contact Online Banking Report/Netbanker editor Jim Bruene. 

6. For more info on the space, see our Online Banking Report on Personal Finance