On the Money Newsletter: Autumn 2006
Magex Deal Adds P2P Line
Two major new systems joined the
BankServ product line in September as
the company completed a deal to acquire
a division of London-based Magex
Holdings Ltd. Known collectively as the
Magex Managed Payments Platform, the pair of products let users send person-to-person payments either online or using their mobile phones.
The Magex mobile payment technology, which is currently being deployed in the Middle East by Zafa Ltd. of Saudi Arabia, presents a chance to enter a market that remains relatively undeveloped in the United States and Europe. Customers who sign up for the service can buy items or send money using a process similar to text messaging. While similar systems have already achieved widespread popularity in Japan, it has only recently been introduced in most other parts of the world.
Once the technology gains a foothold, it will present a viable alternative to physical payment methods like checks and credit cards, and could even offer certain advantages over current ways of making payments online.
"The major reason why BankServ acquired this technology is because of its tremendous potential," said Mary Ellen Putnam, who leads BankServ's international business unit. "For a lot of things like utility bills or monthly rent payments, people are still mailing checks or paying in person. So it's easy to imagine how much easier it would be to do those things using your phone. Someday, you'll probably even be able to pay your mobile phone bill by sending a text message."
Also acquired in the deal was Magex's online P2P payments system for the United Kingdom. The most notable client to use that service is Zopa, an online lending exchange with more than 90,000 members in the United Kingdom. Zopa's marketplace allows members to lend money to or borrow from each other directly in a secure online environment.
By expanding into P2P, Putnam believes BankServ has continued to keep its product line at the forefront of the constantly evolving field of electronic payments.
"Advances in technology are letting the financial industry come up with new ways of moving money every day," she said. "P2P payments have already begun opening new doors in banking, and we've only begun to see a glimpse of their full potential."