A Brisbane technology start-up backed by former Virgin Australia chief executive Brett Godfrey, the co-founders of Wotif.com and former Fortescue Metals deputy chief executive Russell Scrimshaw is taking on the big four banks and their BPAY technology in a bid to shake-up the bill payment industry.
Sniip, which has just completed a $3 million capital raising with an eye to a public float next year, is moving to sign-up clients, including councils and utility companies, to use its mobile technology which allows customers to receive paperless bills or pay their bill in only 10 seconds by scanning a barcode on the bottom of the bill.
Sniip co-founder and chief executive Damien Vasta said the company was taking on BPAY, the electronic payment system which allows customers to pay their bills through their respective bank’s website.
Mr Vasta said the free mobile app was the first serious attempt to take on the market dominance since BPAY was introduced in 2002. The technology has been developed and patented by the Brisbane firm and is targeting people who have become accustomed to using their mobile for everyday transactions.
“We don’t want to be aligned with any bank. We are a consumer-focused payment channel. Anyone who is sent out a bill is a potential customer,” Mr Vasta told The Australian Financial Review.
“Mobile phone payments are becoming a hugely popular method of making payments to billing organisations. Sniip makes payments easier and safer on a mobile, allowing customers to manage their bills more efficiently and simply reducing instances of misplaced bills, forgotten emails and late payment fees.”
Sniip – which is not named after anything in particular but Mr Vasta hopes, over time, becomes a verb like “Google” – is aiming to charge clients about half of the transaction costs of BPAY.
Mr Vasta, who has a background in the airline and technology sector, has recruited some well-known names to back the app. Former Virgin Australia chief financial officer Manny Gill is on the board, while Mr Godfrey – who co-founded Virgin Blue Airlines in Australia with Richard Branson in 2000, has signed up as an adviser. Both have invested money in the company.
Another big-name investor in the $3 million capital raising by Integra Advisory Partners is the Brice family, who helped set up travel website Wotif.com, and Mr Scrimshaw, who is now chairman of UK-listed Sirius Minerals.
Former Australian rugby league captain and Brisbane Broncos legend Darren Lockyer has also stumped up money and has agreed to be a brand ambassador.
Mr Vasta said he had been buoyed by the level of interest from investors saying the money would be used to build Sniip’s profile and to build a critical mass in south-east Queensland before a potential IPO next year.
The company has already signed up for trials with a number of councils in southern Queensland as utility providers.
Sniip faces a mammoth task taking on BPAY which is currently used by more than 150 Australian banks, credit unions and financial institutions.
It was established in 1997 for phone banking and then adapted for Internet banking in 2002. It now covers 95 per cent of the consumer banking market.
BPAY – which is equally owned by ANZ, CBA, NAB and Westpac – is offered on more thanr 45,000 bills across 299 industries. Each day BPAY processes an average 1.5 million transactions worth $1.3 billion.
Story by Mark Ludlow for the Australian Financial Review