Obopay, a three-year-old mobile payments startup, has scored $20 million in additional funding, CEO Carol Realini told me this afternoon. She and other Obopay executives contributed to the round by wiring their investments to the company coffers by way of their Obopay accounts on their mobile phones.
Yes, it’s a gimmick, but it’s also a very real indication of Obopay’s determination. Much like Western Union is the money transfer agent of choice in the real world, and PayPal is online, Obopay wants to be the way to send money for mobile. To do this it will have to win out over PayPal’s own mobile division, plus a myriad of startups such as KushCash and TextPayMe.com. It has the backing. Prior to the most recent round, Obopay had raised $48 million. A company spokeswoman said the $20 million round isn’t complete and that the eventual total may be higher.
Obopay is counting on the experience of people like CFO Dave Johnson, a former CFO at PayPal and Banc of America Securities, because its global money transfer plans require it to handle banking relationships in multiple countries (right now it’s only in the U.S. and India).
It had to get a whopping 41 licenses in order to become a registered money transfer agent in the U.S. The result is that Obopay allows users to store and move money on their Obopay account accessed through mobiles or the web, and also to transfer money from their bank accounts using their phone to that of another person — even if that person doesn’t have Obopay.
The ability to transfer money regardless of a person’s carrier or bank is a compelling proposition. Realini hopes allowing non-Obopay members to receive money will help the company grow over the long term. The money transfer play here is much broader than the “split the check” kinds of social payments offered by KushCash and TextMyBill. The amount of money transfered between countries is in the billions, so if Obopay can expand quickly on an international scale, it could very well achieve what it’s trying to accomplish.