SM: Do you maintain relationships with multiple banks or a single bank?
CR: We have relationships with multiple banks which is similar to how PayPal uses two banks. They use Chase and Wells Fargo. Historically companies buy wholesale services from different providers and, depending on their capabilities, buyers can be selective where they go for those wholesale services.
SM: Is there strategic consequence to that choice?
CR: I would say no although it is a very important relationship. This is all about money and who your providers are. The bank is an underlying provider of core services to us so we do not take that decision lightly.
If you look at what we are doing with Citibank, which we think is a model which will scale quite well, that relationship is unique. Citibank has acknowledged Obopay with the stored value of debit card. They also want to allow their customers to get Citibank Obopay so they will allow Obopay to connect directly to their customer accounts. We are excited about the possibility of this service taking off and other banks wanting similar services.
SM: What about carriers?
CR: Carriers don’t provide banking services but they do provide mobile payment services. A lot of people are buying digital content and paying for it by having it charged to their phone bill. In that aspect carriers worldwide are already in the mobile payment business. We look to establish carrier relationships for carriers who want to offer services like Obopay. We have that relationship with Verizon. We are building it with other carriers around the world.
SM: What is the nature of your relationship with Verizon?
CR: It is primarily a distribution relationship and marketing partnership. We provide 100% of the service. They market it and distribute it.
SM: Let’s talk about your different geographies.
CR: The original plan was to launch in India or Mexico first, and then come to the US. We realized there was a greater opportunity in the US. There was a lot of input we got from young people, families, and we also got input from under banked people that they would like to see this product brought to the US.
The very first US implementation of Obopay was in the early part of last year. The first year here has taught us the product and service has broad appeal. We have people who are 13 using the service and we have people who are 75 using the service. We have kids who get their allowance via Obopay, and others who have configured their social security checks to go directly into their Obopay accounts.
SM: Do you require a relationship with the IRS?
CR: No, it is just like direct deposit from your employer. We partner with the banks, so you can do anything with your Obopay account that you do with your bank account. We discovered that it really has broad appeal in the US. That being said we are still building the company with a global view in mind. We have keen interest in going to other markets and we think the service we build is applicable not only in the US but in India, Africa, and Europe. We are a young company so it will take time to grow it everywhere.