Commonwealth Bank's pilot of the "Beem" mobile payments service is facing a potentially serious challenge to its business case after it emerged that another digital payments company has been piloting a digital payments service in Sydney under a similar name: Beam Wallet.
The existence of Beam Wallet is already complicating the CBA-owned "Beem" operation, with at least 40 pilot customers downloading the wrong mobile application from the Australian Apple App store.
The founder and chief executive of Beam Wallet's Australian and global operations, Serdar Nurmammedov, told Banking Day that his company had received complaints from CBA customers who inadvertently downloaded the incorrect app on their mobile phones.
"There seems to be confusion in consumers' minds, I think," he told Banking Day.
"We know of at least 40 cases where consumers downloaded our Australian app when they thought it was the Beem app marketed by the banks."
Banking Day discovered this week that searches for the CBA-owned "Beem" app in Apple's Australian App Store invariably direct users to the "Beam Wallet" app owned by Nurmammedov's company.
According to Nurmammedov, the launch of the bank-owned Beem service last October also created confusion among current and former Australian business partners of his company.
In 2014 Nurmammedov's digital payments service was trialled by Woolworths at an outlet in the inner Sydney suburb of Double Bay.
"On the day the bank-owned Beem business was launched in October last year, we were receiving messages congratulating us from current and former business partners, such as Woolworths," he said.
"We had to tell them we were not involved."
CBA and two other major banks - Westpac and NAB - announced the launch of Beem on 31 October last year, saying that it would deliver "the next generation of mobile payments and wallets in Australia".
Since then CBA has been conducting a pilot of Beem's first offering - an instant payments service aimed at consumer and business customers.
The pilot is being conducted through a CBA subsidiary known as Let's Pay Pty Ltd.
On 12 February this year, the Let's Pay subsidiary applied to Australia's trademark regulator, IP Australia, for the right to use the trademark "Beam wallet".
Nurmammedov said his company would be opposing the bank's application after Banking Day alerted him to the filing.
"We will be lodging a formal application opposing the registration," he said.
According to ASIC records, Nurmammedov's Australian company - Beam Wallet Pty Ltd - was registered in July 2016, while CBA's Let's Pay subsidiary was registered as a local entity more than a year later.
CBA lodged its application with IP Australia for the right to use "Beem" as a trademark on 5 October 2017.
The timing of these events appears to indicate that CBA was not aware of Nurmammedov's Australian company before the bank's public launch of the Beem business on 31 October last year.
If that is true, the launch of the Beem business raises an important question about the bank's risk management: did it conduct a thorough check of the Australian financial services marketplace and official corporate databases before making a decision on how to brand the B-E-E-M digital payments business?
The answer to that question is now a matter for IP Australia and possibly an Australian court to decide.
Banking Day yesterday alerted CBA to the existence of Nurmammedov's locally registered company and asked the bank whether it would continue to advance its case for the right to use the trademark for "Beam wallet".
In an email sent to Banking Day on Wednesday evening, a CBA spokesperson said: "As is often the case when looking to launch a new product or service, we have sought to register a number of trademarks in association with our service."
The apparent confusion triggered by similarities in the branding and service propositions of the CBA subsidiary and Nurmammedov's company come at a sensitive moment for the bank-owned Beem business.
As reported in Banking Day on Wednesday, CBA and Westpac are preparing to present a business case to ANZ Bank in Sydney next week with a view to luring their Melbourne-based banking rival into the venture.
The branding issue could potentially influence ANZ's response.
It might also lead to delays in NAB and Westpac delivering on their commitments to invest in the Beem business.
Nurmammedov is the founder and a shareholder of Beam Wallet Pty Ltd.
The business was established in 2011 when it was marketed as "Beam Pay".
The rebrand to Beam Wallet occurred in 2013 when the company launched a digital payments service in the United Arab Emirates.
Nurmammedov said the UAE was selected as the first market for a commercial launch after he attracted $3 million from several Dubai-based investors.
After those investors contributed capital to the business, the Australian arm of the business began to operate as a subsidiary of Beam Global Limited, a company incorporated in Bermuda.
Today, Beam Wallet is the largest digital wallet payments provider in the UAE, with a customer base of 700,000, according to Nurmammedov.
The company also launched a wallet product in Sweden last year.
According to Apple's Australian App Store, Beam Wallet has been running a pilot of its digital payments service in the Pyrmont region of Sydney since at least February 2016 - an area that's literally in the backyard of CBA's corporate HQ.
Records maintained by internet domain name administrator, Ausregistry, show that Nurmammedov is the owner of the beamwallet.com.au domain name.
* Readers can learn more about Nurmammedov's global business by visiting www.beamwallet.com.