With Verizon on Board, the Two Biggest Carriers Will Preload Firethorn

Mobile-banking and payments application developer Firethorn Holdings LLC scored a coup this week when Verizon Wireless, the nation's No. 2 mobile-phone carrier, announced it had picked Firethorn as a strategic partner for mobile banking and would preload Firethorn's system onto newly issued phones. The agreement means the nation's two largest mobile providers, Verizon and AT&T Inc., with nearly 126 million customers between them, are now in Firethorn's camp. Basking Ridge, N.J.-based Verizon Wireless, a unit of Verizon Communications Inc., has 62.1 million customers and trails only AT&T in the mobile space. San Antonio, Texas-based AT&T, whose mobile unit formerly was known as Cingular Wireless, has 63.7 million wireless customers, according AT&T's Web site. The U.S. has an estimated 237 mobile-phone users. The Verizon pact essentially completes a process disclosed back in March, when the two companies said they were working to enable Verizon customers to download Firethorn's software to their mobile devices. At the time, that didn't mean Firethorn's system would become Verizon's favored platform. “There were a lot of eyes looking for what Verizon was going to do,” Tripp Rackley, chairman and chief executive officer of Atlanta-based Firethorn, tells Digital Transactions News. “This announcement is the one that really matters.” Thom Russell, consumer products director at Verizon Wireless, says via e-mail that “there are multiple reasons” why Verizon chose Firethorn. “The superior user experience and security of the application makes it a good choice,” he says. “The ability to create a single wallet with access to multiple financial accounts is a key component for our customers. Firethorn fields a strong management team with deep financial-services experience.” Core banking functions such as balance inquiries and account-to-account transfers will come ahead of contactless mobile payments with merchants. “We do have plans to offer additional payment capabilities,” says a Firethorn spokesperson. “It's just a matter of sort of when.” Firethorn's application does enable financial institutions to offer electronic bill-payment services through CheckFree Corp. (Digital Transactions News, Nov. 16, 2006). While the Firethorn application will be promoted to existing handset users, the preloading aspect removes a big impediment to consumer adoption of mobile banking and payments. Rackley would not say how many Verizon phones would be equipped with his company's software, but explains that a light user, such as someone who tells a Verizon customer representative she plans to use a cell phone only in emergencies, would not get a model equipped for banking. That also applies to AT&T, which will preload Firethorn software onto an unspecified number of its phones beginning in November. “We will be on the phones that matter,” he says. “We will be on the majority of devices that are shipping.” Given consumers' rapid turnover of cell phones?estimated average usage of existing devices is 18 months to two years?it's not inconceivable that Firethorn software could be on at least 70 million phones by the end of 2009. With Verizon and AT&T under its wing, Firethorn has a stronger sales pitch with the other telecommunications providers and with banks and credit unions dipping their toes into the mobile-banking waters. Firethorn's announced financial-institution partners include Wachovia Corp., SunTrust Banks Inc., BancorpSouth Inc., Synovus Financial Corp., and Regions Financial Corp. Tupelo, Miss.-based BancorpSouth is rolling out mobile banking with AT&T on Firethorn's platform (Digital Transactions News, Sept. 12), but looks forward to the new customer base it can reach through Verizon. “We are very excited with the addition of Verizon,” Michael Lindsey, senior vice president and manager of electronic delivery services, tells Digital Transactions News via e-mail. “This will give BancorpSouth access to 60% of the wireless market with the addition of Verizon to the Firethorn existing relationship with AT&T. The opportunity of Verizon preloading the application on new phones is also great [for] Firethorn and thus BancorpSouth.” A marketing campaign promoting the new Verizon capabilities will kick off in November with print, radio, Web, and billboard components and will include financial institutions, according to Rackley. Adds Lindsey: “The preloading of the app and the opportunity of joint marketing with the carrier is a great advantage for banks that have partnered with the carriers through a relationship with Firethorn rather than rolling out an application without carrier support.” Firethorn would not disclose its prospective revenues through the Verizon pact.