Now more than 150 years later, BBVA has pooled together a $100 million fund to invest in startups that are developing technology for the financial services industry.

BBVA Ventures is an initiative to help this international banking conglomerate tap into the innovation happening in Silicon Valley. The team is establishing ties with entrepreneurs, startups, incubator and accelerator programs, and investors, and it will make strategic investments in both startups and other funds.

“Investing in startup companies committed to new business models enables BBVA to learn and anticipate the emerging challenges facing the financial services sector,” said executive director Jay Reinemann in a statement. “What’s more, entrepreneurs and co-investors can leverage BBVA’s extensive experience, brand, and global distribution network in the financial sector to accelerate their growth. This is an exchange of knowledge that significantly enhances the capabilities of the bank and the potential financial returns for our co-investors, while at the same time providing the entrepreneurs who lead the innovation processes access to BBVA’s valuable strategic resources.”

The goal is to improve internal awareness of new technologies and the opportunities therein. BBVA Ventures made its first investment in early 2012 in 500 Startups, a well-known incubator program led by Dave McClure. 500 Startups has made a number of investments in financial startups, including Simple, inDinero, PeerTransfer, and WePay. Ribbit Capital, which just yesterday announced a new $100 million investment fund for financial services startups, also received BBVA Ventures money, as did SaveUp is a startup that partners with financial institutions to apply gaming techniques to encourage savings, debt reduction and financial education.

BBVA is short for Banco Bilbao Vizcaya Argentaria SA. The multinational Spanish banking group is the largest financial institution in Mexico and has franchises in South America and the “Sunbelt” region of the United States. Read the press release.

PayPal today announced the launch of PayPal My Cash Card. It is the company’s first “fully branded cash loading token”which easily converts cash into secure online funds.

People purchase a My Cash Card, which are available as of today at more than 30,000 retail locations across the U.S. They then create an account on the companion PayPal site and load the funds into their PayPal account using the PIN number on the back of the card. From there, they can online shop to their hearts’ and wallet’s content.

This is a useful option for people who prefer or only have access to cash, but want to make purchases online. Those folks in cash-flow heavy professions (bartenders, strippers, and so on), people wary of large financial institutions, or those who simply do not have a credit/debit card can now join in the fun of online shopping.

PayPal joined with InComm for this initiative, a company that provides a suite of prepaid products. It is part of PayPal’s overarching mission to be the method that people pay for everything, online, offline, and the netherworld in-between. In August, PayPal announced a partnership with Discover that will bring its technology to the point-of-sale (POS) for millions of merchants. Once the integration is complete, consumers will be able to pay using their PayPal accounts in-store. Rather than pulling out a wallet, all they need to do is type in their mobile number and a PIN.

During a roundtable chat yesterday with Hill Ferguson, PayPal’s VP of global product, he said that all these consumer engagement initiatives are in an effort to create a one-stop-shop for retail payments.

“We have spent the past year and a half reinventing and reinvigorating the brand to give it a personality,” he said. “We have 117 million active users. We help offline users get online and online users get offline to make the shopping experience as secure and convenient as possible. Our vision is to be the global digital wallet.”

PayPal started out as an internet payment service way back in the 1990s and was acquired by eBay in 2002. Like any savvy company in the e-commerce/payments space, it has put a heavy emphasis on mobile transactions and has seen record mobile shopping numbers over the past few weeks. Whether physical wallets are to be relegated to the domain of pocket watches and monocles is still up in the air. PayPal, however, is hard at work to create options for all shoppers, regardless of their payment proclivities.

Again, BankSimple is not a bank. It’s a provider that manages user experiences for banks. Chief executive Joshua Reich likened it to the way gift-card operators work.

The company partners with banks that are exclusively interested in the back-end parts of banking — managing treasuries and regulatory compliance — and outsource the consumer interface and customer service out to other companies.

Users of the service receive a BankSimple debit card — which allows for overdraft protection and free ATM usage. BankSimple also allows users to deposit checks with a smartphone, something USAA has done for some time now.

As payment for running its services, BankSimple receives a fraction of the income generated from the difference between each bank’s loan payment rates and savings interest rates. Reich wouldn’t disclose what percentage of the difference BankSimple receives.

BankSimple has not launched, but Reich said the company had attracted interest from 20,000 potential users. Reich also said the company had attracted interest from some banks that are interested in outsourcing their customer service, but declined to give specific names.

[Photo: alancleaver_2000]

While mobile banking to date has been stymied by incompatibility between banks, carriers, and handsets, the company’s technology works with most major carriers with in the US and supports development platforms Java and Brew (with an iPhone app set to roll out soon). It also has struck deals with leading financial institutions, including Fidelity National and Citibank.

mFoundry, based in Sausalito and incorporated in 2004, has already seen strategic investing from other big players in the banking and mobile world, including Motorola, PayPal, and electronic payments giant National Cash Registers. The company has also raised venture from GRP Partners, Ignition Partners, and Apax Partners. ‘

Less clear is what exactly mFoundry will be doing with Bank of America, which already has 1 million users signed up for their mobile services. While the strategic investment would seem to indicate the company would be using mFoundry’s tech as their new mobile banking platform, mFoundry’s Diane Hong, VP of Marketing, refused to comment on what the relationship between Bank of American and mFoundry would be beyond the strategic investment, only saying, “Bank of America is clearly one of the most successful in the mobile banking market right now.” She also declined to comment on the amount of the investment, funding to date, or board seat implications. We last wrote about the mFoundry it had closed a $15 million round of funding in November 2007, bringing its total funding up nearly $25 million at the time.

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