Tuesday, December 13, 2011

Large U.S. Banks Split on Retail Mobile Payments

Large U.S. financial institutions will be introducing more sophisticated mobile banking apps in 2012, with an emphasis on transactional services such as remote deposit capture and mobile person-to-person payments, which will account for the bulk of mobile investment in 2012.

The banks surveyed remain split on plans to support mobile point-of-sale payments. While the surveyed financial institutions demonstrated a clear understanding of what it will take to make mobile point-of-sale payments a reality, many articulated a chicken-and-egg scenario in which concerns about consumer demand and merchant acceptance are hindering greater investment from their own institutions.

Plans to provide support for mobile point of sale payments vary greatly, with two of the surveyed financial institutions currently piloting such offerings, three saying they planned to support them at some point and the remaining five saying they had no plans to support mobile point-of-sale payments in the foreseeable future.

The survey, conducted by Forrester Consulting on behalf of Fiserv in September 2011, evaluated the plans of 10 banks and credit unions that in total hold more than a third of all U.S. deposit accounts. Fiserv banking survey

While financial institutions view the progress of non-traditional competitors such as technology and telecommunications providers as a validation of mobile payments, and as a promotional tool to build consumer and merchant interest, the majority of the financial institutions surveyed stated that such announcements have had no or minimal impact on their own mobile payments strategy. “This may put them at risk of delivering new capabilities too late,” says Fiserv.

In the near term, banks likely have little to fear from new competitors in the core banking services part of the ecosystem. But banking executives cannot be unaware that in Canada, Rogers, the provider of cable TV and mobile services, already has applied for a charter to become a bank.

The initial thrust there seems to be the issuance of branded credit cards. But nobody thinks it will end there. Porting those capabilities to mobile devices will likely come next.
The white paper is here.

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