Some of us would argue that U.S. banks really cannot make incremental revenue from retail mobile payments, for the same reason one could have argued telcos will have a tough time making incremental revenue from VoIP. For starters, banks and telcos already make money from retail payments and voice, so a new way to pay or make calls cannibalizes the older ways of doing things.
Nor can banks or telcos stop supporting customers using the older tools. They have to add additional channels to support what they already have been doing, without gaining any new revenue. In fact, VoIP typically produces less revenue, and retail payments will follow that same path, over time.
But there are other angles to mobile commerce, in the marketing services and advertising areas, for example. That, in fact, is precisely the tack Google Wallet and Isis now are taking, focusing on marketing and promotion revenues rather than transaction fees.
Though it might initially sound far fetched, some of us also have argued that banks will get into advertising and marketing services, because that is a business which could potentially represent incremental revenue, rather than simply another channel to support.
Now Bank of America proves the point. Bank of America is launching a deals service. The new service, called BankAmeriDeals, will offer discounts awarded in the form of cash payments once a month.
Customers need not sign up for emailed coupons or check a separate web site, as bargain hunters do with offerings from Groupon Inc and others.
When customers log in to Bank of America's online banking site, they will see discount offers -- a percentage off the amount spent at a retailer -- embedded in their statement and under a separate tab. They can accept the offers they want to use.
When customers make their purchases, they pay full price, but at the beginning of the next month they receive cash back in their accounts. Customers can only use Bank of America debit or credit cards to trigger the savings.
The bank may end up holding money for a period of time in the settlement process, but making money off that float time is not part of the program's "core strategy," Godsman said.
Customers can choose to receive alerts about offers and how much money they have saved. They also can opt out of the service.
BankAmeriDeals differs from coupon services offered by other companies because the discounts are based on past spending habits at specific stores and do not require customers to print out coupons, Godsman said.
The bank is not disclosing participating retailers but said they include large discount department stores, fast food chains and local restaurants.
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