MFoundry has emerged as a leader in mobile banking, providing its Software-as-a-Service model to almost 600 banks, credit unions and other financial institutions. Now it’s raising $18 million to expand its mobile banking business into mobile payments, something I wrote about last week with its partnership with new investor MasterCard.
MasterCard and Intel Capital, which are new investors in mFoundry, join existing investors Motorola Mobility and FIS in this round. The money will help build mFoundry’s existing mobile banking business, which includes creating mobile apps for some top banks, including Bank of America and PNC. As it showed last week with its MasterCard partnership, mFoundry is looking to turn those mobile banking apps into digital wallets by adding support for MasterCard’s PayPass NFC payments. That will allow banks to provide their own digital wallets that work at NFC-equipped point-of-sale terminals.
MFoundry, which has raised $50 million to date, is trying to leverage the quick growth of mobile banking, which it said is on pace to hit 50 percent penetration in six years, far faster than ATMs and online banking, which took 15 and 20 years, respectively, to get to 50 percent consumer adoption. It has previously worked on mobile payments with Starbucks, developing and managing its Starbucks Card Mobile payment app.
“The opportunity in mobile financial services is enormous,” said mFoundry CEO and co-founder Drew Sievers. “While our existing mobile banking business is scaling rapidly, there are many other related opportunities that we believe can add significant incremental value to our company.”
This move to add more payment tools could be a big opportunity for mFoundry. As I wrote before, the banks have one of the most trusted financial relationships with consumers and are in a very good position to offer digital wallet services and teach people about new technologies like NFC. At the very least, having an option like mFoundry lets them offer their own alternatives to services like Google Wallet and Isis, the NFC carrier joint venture from Verizon, AT&T and T-Mobile.