BPAY's MAMBO on the verge of collapse

analysis BPAY's ambitious Me and My Bank Online (MAMBO) project looks to be on the verge of collapsing after ANZ Bank pulled its support last week.

ANZ has pushed back from the table with MAMBO. Can the project still work?
(Poker 0308 image by Ross Elliot, CC BY 2.0)

The MAMBO project aims to issue individuals with BPAY biller numbers to facilitate the creation of a single identity for online payments, meaning that it wouldn't matter if a customer moved banks or changed account numbers in the future. The MAMBO project was originally dreamed up in 2007, and has been mired with delays ever since.

BPAY chief executive Andrew Arnott had previously said that a significant portion of the project would be delivered in 2010. However, that deadline is long gone, and ANZ Bank advised the Reserve Bank and BPAY last Friday that it will withdraw from the project, following NAB's decision to jump ship last month.

ANZ said in a statement that NAB's decision to retreat from MAMBO had brought the economics of the project into question. Interestingly, ANZ Bank cited similar issues to NAB when asked why it pulled out of the project, saying in a statement that it had become concerned over the delays and the spiralling cost of the project, versus the cost of its own innovation agenda.

Louis Hawke, ANZ's managing director of Product, Strategy and Marketing, said that pulling out was a difficult decision to make.

"In the end, it was decided that NAB's withdrawal had significantly changed the economics of the program, and our own evolving priorities meant that it was best for ANZ to also stand aside.

We also had our concerns about the rising costs and the slippage of some key deliverables."

Naturally, BPAY's Arnott is less than impressed.

"We are disappointed that ANZ has made this decision," Arnott said, adding that it will be reviewing the implications of ANZ's decision in coming weeks.

The Commonwealth Bank also seems close to withdrawing its support for the project. After NAB pulled its commitment, the bank said it was still deeply committed to making the MAMBO project work. Post-ANZ withdrawal, however, the Commonwealth Bank's position has become less certain.

"There are a number of considerations regarding MAMBO, and following further discussions with the partners, an announcement will be made," the Commonwealth Bank told ZDNet Australia in a statement today.

The future of the project now seems murky, trying to surmount inherent problems in the banking industry. ANZ Bank's deputy CEO Graham Hodges explained the problem succinctly at the bank's most recent technology briefing. He said that the big four banks, while interested in pushing innovative payments, were always the unlikeliest of allies.

"We're very demanding in terms of what we expect of our business models and delivery, and I think that's part of the issue. If it were a single bank doing this, it would just be a matter of getting it in line, but where it's a federation [of banks] and we don't talk to each other very well, that's part of the issue," Hodges said.

Putting all of this aside, the delays have meant that the MAMBO concept may have gone stale. It was a great idea for person-to-person payments in 2007, but perhaps the banks are right to push back from the table on MAMBO and start seriously considering other options, perhaps focussing on technology enhancements that they can deliver, such as near field communication-based person-to-person payments as the way forward, which would make proximity, and not account numbers, the central tenet for transfers.

Banks have often cited the lack of NFC-capable devices in the Australian market as an excuse for not pushing forward with the technology, but it may be a case of "build it, and they will come". If they do nothing, they may well be overtaken by younger, newer services like PayPal.