Fiserv Deals Propel It Deeper into Mobile Products And Prepaid

Banking processor Fiserv Inc. announced a trio of acquisitions in a 24-hour period that included picking up Atlanta-based mobile-banking technology provider Mobile Commerce Ltd., known as M-Com.  Brookfield, Wis.-based Fiserv also announced it is acquiring Maverick Network Solutions Inc., a Wilmington, Del.-based prepaid card processor, and Credit Union On-Line Inc., a credit union service organization. Terms were not disclosed for any of the transactions.

Announced Monday night, the M-Com deal gives Fiserv access to products it can use to expand its reach in mobile-banking and bill payments and ultimately move into the nascent but promising arena of payments based on near-field communication (NFC) technology. “This is a big move,” says Mark Schwanhausser, a senior analyst at Javelin Strategy & Research, Pleasanton, Calif.

M-Com is no stranger to Fiserv, having supplied the engine for the processor’s Mobile Money product since 2008. Indeed, so closely are the two companies entwined that M-Com does not have a U.S. client that is not also a Fiserv client, and M-Com’s personnel in Atlanta work at a Fiserv facility. Nearly 200 financial institutions have signed up for Mobile Money, with “the vast majority” having gone live in 2010, says Steve Shaw, director of strategic marketing at Fiserv, in an e-mail message.

That arrangement put M-Com in front of Fiserv’s network of financial-institution users and potential users in a way the 11-year-old company could not have matched on its own. But both companies sensed they would be better off as a combined entity, especially in light of the quickened pace of competition in mobile financial services. “We probably didn’t go at the speed we could have,” says Serge van Dam, head of marketing at M-Com. “We needed more scale. Fiserv needed access to our [intellectual capital]. That led to a trigger point.” M-Com considers Atlanta, where it manages sales and marketing and where its top officers are, its headquarters. It also maintains an office in New Zealand, where it manages software development with a head count of about 80 people.

Now, as part of Fiserv, M-Com might have an edge in the market, say some observers, who point to a competitive field that includes mobile-banking vendors like ClairMail Inc. and mFoundry Inc. “It’s a horse race, it’s about jockeying for position,” says Schwanhausser. “Nobody in mobile banking has developed a commanding lead. That opens a lane for Fiserv to take a commanding lead.”

That advantage could spill over into mobile payments. Van Dam says NFC is “absolutely a strategic priority” for M-Com now that it is part of Fiserv, though he declines to say when any products based on the technology might emerge. NFC allows mobile phones to act like contactless cards to make payments at the point of sale. Typically, users manage e-wallets stored in their phones that can hold coupons and tickets as well as payment media. The technology heated up late last year with the introduction of Isis, an NFC-centered consortium including AT&T Mobility, Verizon Wireless, T-Mobile USA, Discover Financial Services, and Barclaycard USA.

M-Com has piloted NFC in New Zealand, and van Dam says the company will concentrate on what he calls “integrated” NFC, meaning a product that will include banking and other financial services along with payments. “Payments sitting there alone, there’s nothing interesting about it,” he says.

Besides NFC, Fiserv says the M-Com acquisition will also benefit ZashPay, a person-to-person payments service Fiserv launched last year. “We  do plan to integrate Mobile Money and ZashPay,” says Shaw.

The deal for Maverick, meanwhile, offers Fiserv the chance to introduce reloadable prepaid funding options in ZashPay as well as in its Accel/Exchange electronic funds transfer network and its CheckFree bill-pay service, according to a statement released by the company on Tuesday.

In 2009, Maverick also introduced a PIN-secured debit card that included loyalty incentives and could be issued by merchants.