In February, Citibank announced a partnership with Obopay to pilot the company's eponymous peer-to-peer mobile phone payment service. The two companies launched a pilot in Boston and Chicago this summer with some fanfare (free ice cream sandwiches!) We thought it would be interesting to see how well the partnership is performing in terms of driving new checking and savings account openings for Citi.
The Citi website gets a lot of traffic, but the majority of that volume is from existing customers who are managing their accounts online. We wanted to look exclusively at those who did not log in – visitors to Citi who represented new checking and saving account opportunities. We segmented these Citi prospects into two mutually exclusive groups; the first group consisted of those prospects who visited only Citi and the second group was composed of prospects who visited both Obopay and Citi. The chart below shows the "engagement rate" for each segment, that is, what percent of prospects in each segment start an online checking or savings account application at Citi.
What is clear is that prospects visiting both Obopay and Citi are engaging with online checking and savings account applications at Citi at a much higher rate. In fact, Citi prospects who have also visited Obopay are 2.7 times more likely to start an online application – a considerable lift over other prospects.
Hoping to take advantage of some viral marketing, Obopay.com encourages current users to send invites to their friends and pays $5 for every outgoing invite. Compete observed that about 25% of Obopay's current users send out referrals each month. You may recall that PayPal gave new customers $10 back in its early days (later reduced to $5) and attracted 1 million sign-ups a month. So assuming each Obopay customer sends 2 referrals a month and half of invitees actually enroll, how long will I t take Obopay to cross the "1 million customers" threshold? About 18 months.
Although the engagement numbers are encouraging, impact of the Citi partnership with Obopay has been limited so far because it has only been available in two cities. It will be interesting to see if the viral nature of mobile payments drives additional volume in the months to come. Should Citi decide to roll the service out to other areas, Compete will monitor the demographic make-up of these new prospects and determine whether the offering helps Citi attract a younger checking and savings account customer. Obopay just might be the right partnership for Citi, but we won't know for sure until the numbers tell us so.
Source: Blog compete
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