Mitek Pictures Itself as a New Tech Provider in Mobile Biller-Direct Payments

Mobile-imaging software developer Mitek Systems Inc. on Wednesday announced its Mobile Photo Payments application that enables large billers to receive bill payments from consumers using their mobile devices.

The service complements San Diego-based Mitek’s existing Mobile Photo Bill Pay product, which rolled out last year and is distributed mainly through financial institutions’ mobile-banking channels. Mitek discovered that many Mobile Photo Bill Pay users, often young adults whose digital lives center on smart phones and tablet computers instead of desktop computers, were using their banks’ mobile-banking services mainly to pay recurring monthly bills, Mitek chief marketing officer Scott Carter tells Digital Transactions News. At the same time, large utilities, telecommunications companies, and other big billers were looking to tap into the growing mobile bill-pay trend.

“What the national billers were telling us was the No. 1 reason consumers were logging on to their Web site was to pay a bill,” says Carter. But many customers found the bill-pay process tedious, leading to “a large number of abandonments,” he says.

With those market signals, Mitek developed Mobile Photo Payments as a service that requires little or no data entry by the customer. It works on the mobile Web and through mobile apps for Apple Inc.’s iOS devices and Android phones and tablets. One large national cable TV and telco firm that Carter wouldn’t identify is already using it, and “a handful of other firms are in test mode.”

To pay a bill, the consumer goes to a client biller’s mobile Web site, or uses the biller’s mobile app, and finds the section for bill pay. Then the consumer is prompted to snap a picture of the paper bill or its payment coupon with the mobile device’s camera. The current live client uses the wording “Pay With Account Number.”

“The account number is really the critical piece,” says Carter, noting that with it the biller can pull up the amount due, due date, and related information. While using a  photograph of the payment coupon is the simplest way for the biller to retrieve bill data, Mitek’s technology can scan an entire paper bill for the relevant information. Built into it is “fuzzy logic” that standardizes different language for the same process or function, such as “payment due” and “balance due,” according to Carter.

After that, the consumer pays by snapping a picture of the front of a check and uploading the image through the service so that the biller may initiate an automated clearing house transaction. That aspect of the service uses Mitek’s original technology for making mobile deposits to bank accounts. Or the customer can pay with a major credit or debit card—a new Mitek feature—by snapping a photo of the front and back of the card. With Visa and MasterCard cards, the front image will capture the account number and expiration date, while the back image will capture the so-called CVV2 or CVC2 (Card Verification Value for Visa or Card Verification Code for MasterCard), a three-digit security code for online transactions.

Carter says the customer can edit pertinent information but probably will not need to do any manual entry except possibly change the payment amount if desired.

Mitek expects the majority of transactions will be generated through the mobile Web because comparatively few consumers download the mobile apps of utilities and other common billers. “We’ve done a lot of consumer research,” Carter says. “Consumers tend to be willing to download a mobile-banking app because they expect to be interacting frequently with the bank. We can’t count on that being the case with a utility or telco bill.”

Mitek is aiming for the nation’s top 100 to 150 billers as potential users of Mobile Photo Payments, though Carter will not reveal precise goals for a year from now. “We think that’s the sweet spot…we think we can penetrate a number of those,” he says. In addition to utilities and telcos, Mitek is targeting general-purpose and private-label credit card issuers, and mortgage, auto, and student-loan lenders.

Publicly announced users of Mobile Photo Bill Pay include U.S. Bancorp, BBVA Compass Bancshares Inc., First Bank Colorado, and processor Allied Payment Network Inc., which distributes the service to smaller financial institutions under the Picture Pay brand. Mitek also says about 20 million customers have used its mobile-deposit technology.