Wednesday, August 22, 2007

Can You Make Money From Mobile Banking?

We were getting upset that our questioning of Monitise's pre-floatation quotes had dropped to #6 on the Google results page for 'Monitise', when suddenly as if by magic their financials came in. Following their AIM floatation their share price dropped about 20% in the first week of trading whilst the stock markets were still bouyant, before settling into a slow slide to their current position at about 60% of the flotation price in somewhat harsher climes - so what does this mean for the profitability of mobile banking, and financial servies beyond that?

Looking at the financials breakdown PDF, those "12m" customers they had (which should be "33m" now apparently - they never did clarify their real number, to my knowledge) have contributed to £500k in revenue in the last year, alongside consultancy revenues and "the intial flow of business from overseas". That'd make 4p/customer if we ignored the consultancy and assumed the 12m customers. I'd be inclined to suggest they have fewer customers but most revenue came from consulting - it would be very interesting to know more but the detail just isn't there, at least for a non-accoutnant such as myself.

This does raise a valid point on mobile banking - who should pay? I can't see Monitise's charge of 20p/balance to customers, on top of their operator data costs, being very appealing which leaves only the banks funding it as they fund their web sites, to cut customer interaction costs in the long run. That means either up-front consultancy fees to customise the service, or some sort of per-usage payment from the banks based maybe on cost savings (a very vague concept... I wouldn't like to be a software vendor drafting a contract based on that). These revenues suggest that Monitise cannot be making any real money on the customisation for the banks (with over 5 banks live now, that's be under £100k per bank - peanuts that couldn't scale to justify their valuation), but are they getting any per-user fees? We may never know, but banks are not known for their generosity (outside of the bonus pools of course).

Looking at Monitise's longer term position, I'm slightly stuck:
"As a result of the demerger and capital reorganisation of the Group, a merger reserve of £33.0 million and a reverse acquisition reserve of £(25.3) million have been created."
By my understanding that means they spent £25.3m to get a fairly poor MIDlet, a back-end integrating into Link and some sales work (having used the system, I am guessing/hoping they spent £25.29m or more of that on the backend and the sales). This leaves them with about £8m, which would mean revenues had better head north soon else they're going to be doing some strong cost restructuring soon (parent Morse pumped £8.8m into Monitise in 2007 alone). But I know very little of financial reports so this could misrepresent their position and everything may be peachy... I'd love some clarification from someone at the company?

It's very interesting to see these results, albeit an early set based on only a year or so with the earliest banks to launch. If I was a cynic, I would say that Monitise are busy proving that there is little to be made from charging bank customers 20p/balance with no backup revenues - but it does leave as an open question where money is to be made by mobile application developers. Can you make money when you have to pay off the multi-million early investments being thrown at these start-ups? I really hope Monitise proves that you can (writing a good mobile client might help - their proclaimed "consumer-centric product roadmap" must be a new thing introduced after the client I saw).

6 Comments:

Blogger Geniusideas said...

Great blog! but we need high traffic to earn. One way get this is a link exchange, so I hope we can exchange our link especially when you register under technorati - leave your answer in my blog Google adsense

5:19 pm

 
Anonymous Anonymous said...

We provide all kinds of excessive prominence s that go about a find in a disparity of styles,[url=http://www.safeandsoon.com/]cheap wedding dress[/url]
colors and sizes at wholesale price.All are cheap with clothes-horse styles allying apparels including draughtsman uniting adorn, strand coalescence dresses, connubial gowns, bridesmaids dresses, prom outfits, bloom skirt dresses & nurse dresses.Even we can stock the services of free vastness customization and without coupled with measure Snitch on affordable amazing wedding dresses minute!lift hot shopping, array perfectly looking for the big wedding ceremony with the expropriate of G-marry bridal.


http://www.safeandsoon.com/

4:45 am

 
Anonymous Anonymous said...

[url=http://monclerjassenjas.org][img]http://monclerjassenjas.org/bmz_cache/a/a329c9e38e2175f873363788544a9c4e.image.232x310.jpg[/img][/url] [url=http://moncler-jackor.org]Moncler[/url] ZbeGhb PgaYkn [url=http://christianlouboutinpascheronline.net]Christian Louboutin[/url] HurCut [url=http://www.canadagoosetilbudnorge.com/canada-goose-montebello-parka-red-billig-canada-goose-oslo-pi-81/][img]http://www.canadagoosetilbudnorge.com/bmz_cache/3/3210f63d2898d3ead7b7fed69a1bf46e.image.232x350.jpg[/img][/url] NwoPto [url=http://www.true-religionbrandjeans.com]True Religion Jeans[/url] VkiGzt [url=http://www.handtascheonline.com]MIU MIU[/url]
PxbSdq [url=http://www.hogan-schuhe.net]hogan schuhe[/url] [url=http://nikeairmax-women.com]Nike Air Max[/url]
UveCzx [url=http://www.handtascheonline.com/mulberry-handtaschen-65.html]Mulberry handtaschen[/url]
[url=http://www.monclerjakkevinter.com]moncler[/url] LpwXvm [url=http://www.canadagoosetilbudnorge.com/canada-goose-norge-c-15/]Canada Goose Norge[/url]
[url=http://www.mbtdk.dk]mbt[/url] VgvQkg [url=http://www.taskaonline.com]Burberry T谩ska[/url]
[url=http://www.mbtdk.dk]mbt sko[/url] YtkMkd [url=http://www.taskaonline.com]Coach T谩ska[/url]
[url=http://www.hogan-schuhe.net]Hogan Schuhe[/url] QthMiu [url=http://moncler-jackor.org]Moncler[/url]
[url=http://www.hogan-schuhe.net]Hogan[/url] KbnWez [url=http://www.canadagoosetilbudnorge.com]Canada Goose[/url] QxoPwf

8:03 pm

 
Anonymous Anonymous said...

[url=http://www.torreysmithjerseys.com/]Torrey Smith Women's Jersey[/url]

Cheryl Perlitz ~ 2004 All Rights Reserved In the business world, Cheryl Perlitz is best known as the author of the popular book, "Soaring Through Setbacks - Rise above adversity - Reclaim your life" and her upcoming book Survival Tips Handbook Check out the physical characteristics of the facility How much are you worth?Science And The Bible Don't Agree: When most of the world was afraid to sail too far out on the ocean for fear of falling off the edge of the world, the Bible clearly indicated that the world was roundcom or yahoo

[url=http://www.peytonmanningwomensjersey.com/]Peyton Manning Women's Jersey[/url]

Rather than saying no, a word that doesn't really mean anything to a dog, try growling in a deep, throaty voice the next time you're unhappy with something he's done The typical result of the Name That Tune - shorten the session for my people Game, is training that is little more that exposure to a topic area - not training which can transfer real skills, with real practice time in the classroom We sin, not because we are told not to sin, but because it is in our natureHow Much Are You Worth: Your mind may have already begun to drift toward your last bank statement or the assessed value of your home by now

[url=http://www.navorrobowmanjersey.com/]Nike NaVorro Bowman Jersey[/url]

4:43 am

 
Anonymous Anonymous said...

[url=http://www.ashfootwearr.com]ash footwear[/url]
[url=http://www.ashfootwearr.com]ash shoes[/url]
[url=http://www.ashfootwearr.com]ash store[/url]
[url=http://www.ashfootwearr.com]ash outlet[/url]
[url=http://www.ashfootwearr.com]ash sale[/url]
[url=http://www.ashfootwearr.com]cheap ash[/url]

6:32 am

 
Anonymous Anonymous said...

[url=http://www.texansjerseysvip.com]custom jerseys football[/url]
[url=http://www.texansjerseysvip.com]customize team uniforms[/url]
[url=http://www.texansjerseysvip.com]cheap custom soccer uniforms[/url]
[url=http://www.texansjerseysvip.com]houston texans clothes[/url]
[url=http://www.texansjerseysvip.com]cheap texans jerseys[/url]
[url=http://www.texansjerseysvip.com]cheap texans jerseys[/url]
[url=http://www.texansjerseysvip.com]cheap texans jerseys[/url]
[url=http://www.texansjerseysvip.com]cheap texans jerseys[/url]

6:40 pm

 

Post a Comment

<< Home