Making an end run around PayPal


To: 66239 (MOBEX) 
Message:SEND $5 4165551234

What do you get when you cross PayPal with Twitter?

You get something that looks remarkably like RBC’s Mobex Mobile Payment Service. The service lets Canadians send money from their mobile phones. Feels kind of European. It’s like the future but it’s here right now. Basically, you sign up over the web for an intermediary account. The account is connected to your bank accounts and your credit cards. The service is currently limited to a maximum $100/day transfer. But it is not hard to see beyond these initial limitations. (The program is in pilot for “Friends and Family”).

Participants in the trial are able to use the RBC Mobex payment service on their existing mobile phone, providing it has SMS – text messaging capability. Users simply send a text message to RBC Mobex with the dollar amount and the recipient’s cell phone number. Funds are then taken from the sender’s Mobex account and moved to the recipient’s Mobex account. The recipient also receives an instant text message on their cell phone to let them know when the money has been sent to them.

Amounts of up to $100 per day can be sent to anyone with a mobile phone serviced by any Canadian wireless carrier, even if they do not have an RBC Mobex account. Recipients just need to register for the payment service to access their funds. The RBC Mobex account is a stored value account and enrollment is through the RBC Mobex web-site, where money can be loaded from any bank account with any financial institution in Canada, or by using a credit card. – RBC’s mobile phone payment system lets Canadians send and receive money right from their cell phones


You can add money to your account from your bank account or your credit card as a transaction. That means it’s not a cash advance and you’re not charged the loan shark interest rates. It is interesting to connect accounts to a mobile phone number. Now that Canadians have Mobile Number Portability it is possible to start using these as unique identifiers. (There are still open questions about the longer term use of mobile phones a unique identifier).

It is interesting to see a Canadian financial institution build prototypes and begin to investigate the marketplace for alternative payment tools. It is not that the financial institutions are stagnant, they continue to build services like Email Money Transfer with Interac. I wonder how many Canadians have PayPal accounts?

“In the U.S. and Canada, PayPal is used for 70% of the gross merchandise value on the eBay platform” – Dana Stalder, VP of Marketing & Business Operations, PayPal

But this is a great attempt to build the next generation of personal banking solution by an existing trusted institution. It will be interesting to see what the next generation of Canadian consumers think of using their mobile phone as a banking tool. With 58% of 12-17 year olds owning a mobile phone (Forrester’s Consumer Technographics Q1 2005 North American Youth Devices & Access and Finance Online Study) and over 76% of US households increasing to over 90% for GenY homes, it makes perfect sense to bet on the mobile device as a the starting point for cashless transactions (Forrester Benchmark 2008: Mobile is Everywhere by Charles S. Golvin).

With cash losing its relevance, the WDA [Wearable Digital Assistants] will become the primary payment device within the next 10 to 15 years.9 The WDA will replace the physical wallet for anonymous micropayments and enable point-of-sale payments with direct debits. – Intelligent Devices will Drive Ubiquitous Banking 

This is RBC making a really strong bet on building a Canadian mobile monetary platform without having to rely on the carriers. The carriers are just that, carriers of the SMS and HTTP packets that reach mobile phones, mobile web browsers and web browsers of the banks customers. I wonder if there is a way that they can or will build this beyond the Canadian borders. Good on RBC, they seem to be putting a stake in the ground based on solid research.

The program is open for any Canadian bank account holder to try out. Sign up and give it a poke, i.e., send me money 😉

2 thoughts on “Making an end run around PayPal”

  1. Cool, looks interesting. The Interact Email money transfer is maybe the best financial service available for startups. <br />
    <br />
    One gap right now is micro-payments, transactions that are $1-2 get destroyed by admin/transfer fees…

  2. Cool, looks interesting. The Interact Email money transfer is maybe the best financial service available for startups.

    One gap right now is micro-payments, transactions that are $1-2 get destroyed by admin/transfer fees…

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