Software engineering company moves from supporting products to creating its own
On a trip to Disneyworld, RBA International President Rene Babi noticed just how many kids have access to their parents’ credit cards. And the only way to control spending was to take them away – until now. Babi turned an idea generated during that trip into a debit card with features never before seen in the banking industry. RBA’s new card can be turned off and on with the press of a cell phone button.
Vancouver-based RBA International’s small staff of software engineers has designed and developed custom software for clients in almost every industry, including finance and banking, telecommunications, manufacturing, logistics, health care and government. The State of Washington is one of its largest clients. The state’s Department of Health runs multiple applications, including a vaccine tracking system.
Babi founded the company along with Mark Silbernagel, RBA vice president of engineering, in 1994. The two already had a long history with each other, working together at Hewlett Packard, Mentor Graphics and Sequent Computer.
The business ramped up in the dot-com era to meet demand from start-ups. At the time, Babi said the company began considering the possibility RBA could move from offering back-end support for its clients’ products to developing their own.
Babi said the company dabbled in product development, and finally the right idea came along.
Function and form
The most unique aspects of RBA’s debit card are its mobile banking capabilities controlled by systems developed by RBA. Card users have the ability to manage the card using their cell phone.
"Cell phones are the most ubiquitous appliance in the world," said Babi.
The mobile banking features include the ability to turn the card on and off, transfer funds to the card, check balances and receive text messages to keep users posted on the card’s activity.
For example, a user out to lunch could use their cell phone to call the automated directory to check the balance of the card and activate it for one purchase. Once the card is used to pay for the meal, the card is automatically turned off.
The card is designed to be used either by those without bank accounts or as a complement to existing accounts.
The card’s security features come at a time when awareness of the dangers of identity theft is on the rise. If a lost or stolen card is turned off, it can’t be used. Since funds can be transferred to the card from a checking or savings account, users do not have to carry around other cards that lack the same security features. Funds can also be transferred from a credit card as if it were a purchase from a store, eliminating cash-advance fees.
"By not having to carry them or ever use (other cards) you never expose yourself to fraud," said Babi.
The millions of people who do not have bank accounts or have a past history of debt also are potential customers. Reoccurring deposits, such as a paycheck, can be put on the card and it becomes a tool for teaching responsible money management. Parents can give children a limited amount of funds on the card and control spending. Businesses could use the pre-paid cards instead of sending employees out with credit cards, which can be a liability. Health savings accounts can also be accessed using the card, which recognizes purchases eligible from HSA accounts and takes money from there instead of the user’s funds.
Customers can enroll in the program for about $7 and pay a monthly fee of about $3.
Banking on a new system
The card was a natural extension for the company, as it has done a lot of work in banking, telecommunications and prepaid services. RBA had the ability to build the entire system, allowing them to keep the price of the product low.
"We were very familiar and knowledgeable about how the debit card business worked," said Babi. "We believed we could do a better job."
RBA partnered with West Coast Bank to launch the card.
"West Coast Bank is the issuer of the card, RBA is the processor that provides the functionality," said Bob Sznewajs, president and CEO of West Coast Bank.
West Coast Bank was attracted to the uniqueness of the card’s features in the marketplace.
"(RBA) has a unique skill set and ability to provide us with this product that we think is innovative and fits our strategy of offering innovative products and services," said Sznewajs.
The success of the product remains to be seen, said Sznewajs.
"A lot of innovation comes along," he said. "The test is how consumers react to it."
Second time’s a charm?
RBA is in its second effort to get the product off the ground. The company first launched the product in December 2004. With no prior product marketing experience within the company, RBA created several subsidiary companies to market the product.
"We are engineers, we are great at making things, we are not so great at telling people about them," said Babi.
But it turned out its subsidiary companies were no more prepared for the task.
RBA staffed the companies with individuals it had existing relationships with and were excited about the product, but, like RBA, had not been involved in marketing products.
"That was not well conceived," he said. "If we had to do it over again, we would probably go to a consulting company and have them find the best companies for us to partner with."
The companies are situated in several markets across the U.S., including locally. Each company markets the product under its own brand. Affinity Card Systems, located across the hall from RBA in downtown’s M.J. Murdock Executive Plaza building, markets the Ethos branded card, for example.
RBA Financial Services, based in Salem, handles the banking interface and customer support for the product.
Now RBA is touring the country and staffing its subsidiary companies with people who know how to market the product. And Babi just finished an infomercial that will run first in southern California and spread from there.
Babi declined to reveal revenue for the privately-held company, but he said it has been profitable from the beginning. RBA International has 11 employees in its Vancouver office and more than 60 nationwide including its subsidiaries.
