December 5, 2012
Mitek Systems Inc., the leading developer of software for mobile remote deposit capture, announced on Wednesday that U.S. Bank will offer its new Mobile Photo Bill Pay product to its customers in 2013. The news is a breakthrough for Mitek in taking its key mobile-imaging technology beyond its original deposit function.
San Diego-based Mitek counts the nation’s 10 largest financial institutions as customers of its Mobile Deposit software that enables their customers to deposit a check by snapping pictures of the front and back using a smart phone’s camera and uploading the images through their mobile-banking application. Now U.S. Bank is a customer of Mitek’s Mobile Photo Bill Pay service that uses the underlying imaging technology so that a consumer can snap an image of a bill on a mobile device and pay it through the bill-payment portion of U.S. Bank’s mobile-banking service.
"We’ve really strived to offer these strategic innovations that are sort of game changers for the customer,” Chris Peper, vice president and manager of U.S. Bank’s mobile channel, tells Digital Transactions News. “We really see photo bill pay as another step on that journey."
U.S. Bank, the lead bank of Minneapolis-based U.S. Bancorp and the nation’s fifth largest, began offering mobile-banking services in July 2008 and added mobile-deposit capabilities using Mitek technology in March 2011. Peper says the bank has taken 2 million mobile deposits worth just over $1 billion since then from consumers and small-business customers. “We’ve seen really strong growth,” he says, adding that “we have high hopes” for mobile bill-pay service.
U.S. Bank charges 50 cents for a mobile deposit, but Peper says the bank hasn’t yet made pricing decisions for the bill-pay feature, which it will roll out early next year.
Many of Mitek Systems’ 564 Mobile Deposit customers, mainly financial institutions but also processors, are asking about Mobile Photo Bill Pay, says company president and chief executive James DeBello. “We have a lot of activity, we are in pilot with a number of top banks,” he says. “We think there will be additional customers announced in the top 10 in 2013.”
Formatting bill images for payment through a mobile-banking application is a challenge because, in contrast to checks, there is no standardized template for the myriad of bills from utilities, phone companies, publishers, and other billers. “Mitek has really worked to solve that challenge,” says Peper.
DeBello says that although no deals are pending immediately, the company is talking with some billers so that consumers could pay those companies under the biller-direct model using mobile devices.
Mitek’s stock price soared 34% on Wednesday to close at $3.22, up 82 cents, apparently because of the U.S. Bank news. The company is broadening its product line by using the core imaging technology it developed for mobile deposit for new uses such as imaging bills, credit card applications, and other financial documents. Mitek also provides the technology for adding mobile deposits to prepaid cards such as the new Bluebird card from American Express Co. and Wal-Mart Stores Inc.
Mitek’s share price, however, is still way off from its 2012 peak of $12.56 in March. A big reason for the decline is the patent litigation that broke out last spring between Mitek and USAA Federal Savings Bank, a pioneering financial institution in remote deposit capture that worked with Mitek in developing the technology. The litigation is still ongoing.
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