The company, which in June was spun out by IT services group Morse, is at what directors describe as its investment phase and burning money. For its first full year to June 30, it posted a net loss of 5.9m pounds ($11.7m), up from 2.4m pounds ($4.7m) on revenue of 470,000 pounds ($935,196), up from 240,000 pounds ($475,5323).
But investors are interested in Monitise’s promise and its boast that it is the leading player in the UK mobile banking and payments market, with a strong foothold in important overseas territories and substantial interest from potential partners and customers.
Chairman Duncan McIntyre said that although the mobile banking and payments market is still in its infancy, the evidence suggests that it should rapidly become one of the main channels to market for the banks. Banks have expanded banking services from branch networks to self-service channels such as ATMs, to internet banking and telephone banking. McIntyre said he sees mobile banking as the logical continuation of this trend.
He said there are major developments within the industry that will lead to the mobile handset becoming the initiator of payments on a broader scale. It will, in due course, allow consumers to initiate peer-to-peer and remittance payments, manage accounts and access their sources of funds to reload whatever electronic payment method is being used.
There is already a fledgling market for cashless transactions using stored value cards, in response to the industry requirement to reduce the cost of low value transactions currently serviced by cash, but he feels a mobile interface and top-up mechanism will be essential to their success.
Though it has yet to generate substantial revenue, Monitise said three major UK banking groups and seven UK mobile operators are now using its platform. It has a joint venture with the banking and payment specialists Metavante in the US, giving it access to a potential market of over 8,600 financial services firms
It said the mobile banking and payments market is rapidly gaining momentum, not dissimilar to the growth of internet banking in its early stages. Monetise believes that its technology has the mass-market characteristics required for mobile banking to become a ubiquitous banking channel.
