The Mambo tango

Banks have begun to cooperate once again on a project to develop an upgraded, direct credit payments service.

Dubbed "Mambo", an acronym for Me and My Bank Online, there is very little public domain material on this proposal.

The project is a spin off, and being run by, BPay, the bill payment service created by banks in the mid 1990s and which rides on the batch processing direct credit system used by banks for decades.

Exactly what this mooted service might do is pretty vague.

Commonwealth Bank, in a submission to the Reserve Bank of Australia in mid 2008, described the project as a "new online payment services through BPay, outside the Eftpos system".

ANZ, in a separate submission, wrote that the Mambo concept would "interconnect banks, organisations and consumers … using new electronic addressing capability".

This capability appears to be a variant or extension of the current BPay framework of unique biller codes for each merchant and a related account number that the merchant allocates to their customers.

Banks developed the first proof of concept for Mambo in 2006.

The suggested investment budget for the project is said to run into the hundreds of millions.

Work on the project stalled in the second half of 2008 with big banks divided on the merits of the business case.

Mambo appears to be of interest to banks once again.

A cynical interpretation of this is that the banking industry realises it needs to be seen to be doing more, in the eyes of the Payment System Board, to innovate in debit payments, and this may be a valid explanation.

A more favourable view is that banks are working out viable ways of updating the payments options available to business and household customers, and that collaborating over standards and undertaking joint investments is essential to meeting customer needs.