An Update From Sapphire Mobile's CEO Rick Rasansky
We had an opportunity late last week to speak with Rick Rasansky, Chairman and Founding CEO of Sapphire Mobile Systems based in West Conshohocken, PA. Rick was just back from last week's Prepaid Expo where Sapphire announced a partnership with US Bank's Elan Financial Services to conduct a mobile banking and payments pilot for Elan's PayCard customers.
According to Rasansky, Sapphire (Phire for short) began exploring mobile banking and payments a couple of years ago. We first noticed them at Glenbrook about a year ago - when they were aggressively advertising on the web to hire payments professionals to work on mobile payments.
Phire's approach is to act as a next-generation debit network - enabling banks to offer mobile banking and payments to their banking customers by integrating their banking systems with Phire.
It's very reminiscent of the approach taken by 7/24 Solutions, among others, back in the hey-day of the dot-com boom five or six years ago. But, Rasansky claims, a whole lot is different now vs. then.
Handsets have been deployed with universal capability for SMS (short message service) text messaging capability built-in. Back then, mobile banking relied on very clunky WAP-based browser technology - with dramatic differences phone to phone.
Today, ACH can be used to move money between mobile user accounts at different banks - that also wasn't possible before NACHA's rule changes enabling the WEB transaction type several years ago. Phire's basic approach - for what they call 'PhirePowered' banks in the network - is to debit and credit the payor and payee, respectively, in real-time for "on net" transactions with ACH as the "fallback" for loading accounts and transferring funds to "off net" accounts.
While some in the industry have been concerned about the use of SMS for PINs, Rasansky says that Phire's security approach ensures that users are strongly authenticated before they can move money. By avoiding an IVR callback (such as that used by PayPal Mobile and others), the user experience of Phire's approach - while still text oriented because of SMS, he claims is more convenient and at least as secure.
Rasansky's also got in mind a whole new set of economics for mobile-based payments to merchants - as outlined on the Phire website. Whether those economics end up working for banks - and merchants - is yet to be seen.
We look forward to hearing more about Sapphire Mobile's progress during 2007 - the year of mobile banking decisions!
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