I’ve chatted what seems to be endlessly about this concept in the States. The problem here is that the Federal Reserve controls the issuing of the routing numbers, which are the first half of the payments equation here. Same goes for BIN numbers, which are the first part of the credit card number that gets assigned to each issuing institution.

Banks have no real motivation behind doing this because in their mind, they will just lose the business. The cell phone companies had to be mandated by the FCC to allow for account portability and I just can’t see the FDIC, NCUA, or OTS stepping up to the plate to do that!

I’m not sure as to your familiarity with the Australian system of payments or BPAY.

BPAY is essentially a payments system where people are able to quickly and easily pay their bills, at a low transaction cost. Retail transaction costs are about 20 cents per transaction, and I would assume that the banks make a considerable profit on this, as is.

The MAMBO proposal is to essentially reverse this situation, or at least distort it somewhat. The end user has their own BPAY Biller code & Reference number that they give out, and I assume that the end user can decide what bank account they want this linked to.

I do not believe that the cost behind this would be anywhere near prohibitive. Almost all bills you get have the option of going BPAY – even smaller chains and stores.

The main cost of this exercise is going to be marketing related, I assume.

It would be nice to have this scheme mandated by the Rudd Government, and I think there is a possibility of this happening. Wayne Swan seems hell bent on getting the whole portability scheme… and if BPAY can manage to talk up the portability side of this project, they may be able to get some sort of government funding so that this costs the end user nothing.