(Updated with more info on security functions)
ClairMail, a Novato, Calif. start-up, allows customers to transact business through SMS or email from their mobile phones. It has raised $12 million in second round of funding.
A number of companies, including 4Info and Google, let users use text messaging to get information — such as movie listings, sports scores and weather. However, they don’t support transactions with banks. Only ClairMail has built out the secure infrastructure to do that, says its chief executive Joseph Salesky.
The funding was led by JAFCO Ventures. Existing investors Norwest Venture Partners and Outlook Ventures also participated.
Clairmail lets customers do their banking via SMS, including transferring funds, verifying account and transaction information. A customer messages the bank from their phone, and the bank confirms the customers identity by texting back to the phone and opening up a channel for a transaction.
What if someone loses their phone, and another person takes it and tries to text the person’s bank account and remove cash?
Salesky said that is unlikely to happen, because cell phones are usually the first thing people realize is missing, and all they have to do is call to their carrier, and have it switched off — and that a thief is unlikely to know how to text a bank, and which bank to text. (Update: Moreover, when someone transfers funds, Clairmail pushes them a WAP link or calls them to prompt for a PIN, to provide additional security. Neither the WAP link nor the PIN are stored in the phone.)
The company was founded two years ago. Previously, Salesky was at Oracle for several years, and then founded Pixion, which he said invented web conferencing, and another company, Skytron.
The idea for the company came after he realized how the phone bill is the biggest expense in his home, but that its messaging capability is archaic. Why not use email and texting as an accessing technology, he decided.
The company has several customers, including one that spends over $1 million a year, he said, declining to disclose the customer names.
8 Comments
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Mike said:
What a joke.
In Europe most major banks offer this functionality. Yet I have to find one person who really uses it (and isn’t using it just to prove something). It’s just so much faster to use telephone or online banking.
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Harshal Vaidya said:
In India, Reliance Communications enables checking your balances, transfers and other small services via SMS and (WAP) via the browser. I guess this aint new.
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Joe Salesky said:
The concept of mobile banking is not new. What has been missing is a system that makes this work well for banks to implement and users to actually use.
Mike’s comment drives home the fact that many of these home grown attempts have failed to make it easier than calling the bank. Making something simple to use is actually hard to do.
For many calling the bank, keying through the IVR and Waiting on hold while your cell phone gets dropped is a pretty frustrating experience.. (Citibank has poked some fun at this in their commercial where the guy shouts “big boy”).
Making it easy for you to get to the bank, and for the bank to get to you in a frictionless way to verify transactions when necessary is the key. Today fraud only occurs because it is too costly for a bank to verify unusual transactions with you. Creating a system that can pass the security and scalability tests of the banks and utilize the mobile phone as a channel for improving both security and access is our goal.
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Derek Handley said:
This is totally unbelievable. Mike is absolutely correct..mobile banking is about 3 years old with complete SMS, WAP and application solutions available worldwide, and totally integrated in to banks back-ends in full… Silicon Valley has definitely gone nuts.
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2 Trackbacks
8:52 am
VentureBeat Wire » Clairmail raises $12M to let you bank via SMS said:
[...] See our story here. VentureBeat Community [...]
10:54 am
The Cellular Life Style - » Cellular Life Styles Apart - Vol.2 said:
[...] Mobile Banking: ClairMail allows you to transact business through SMS or Email on your cell phone. (Source: VentureBeat) “Clairmail lets customers do their banking via SMS, including transferring funds, verifying account and transaction information. A customer messages the bank from their phone, and the bank confirms the customers identity by texting back to the phone and opening up a channel for a transaction.” [...]