Forward-Looking FIs Focused on Mobile Payments Business Case
Fiserv, a financial services technology solutions provider, surveyed 15 top US banks and credit unions that revealed a ‘wait and see’ attitude toward mobile payments. While most financial institutions (FIs) have clear-cut strategies for mobile banking, they indicated that the market will need to mature further before they make any sizable investments to support mobile payments.
The survey, conducted by independent research firm Forrester Consulting, revealed that banks and credit unions have clear long-term mobile banking strategies. Through the remainder of 2011, FIs plan to enhance the value of mobile banking by enabling support for newer operating platforms and devices and adding more robust functionalities. In contrast, very few of the surveyed FIs have clear mobile payment strategies in place, leaving them at risk of falling behind other companies that are rapidly entering the space.
“Mobile payments were a hot media topic in 2010, but not all mobile payments are created equal,” wrote Brad Strothkamp, principal analyst, e-business and channel strategy, Forrester Research, in the report, ‘Ten North American Retail Banking E-business and Channel Strategy Trends to Watch in 2011’. “In 2011, bill payment and transfers via mobile devices will undoubtedly increase as availability and utilisation of mobile services grow. Contactless payments will not have the same success…these types of mobile payments have major impediments to success, including technology, merchant, consumer, and issuer issues.”
Banks and credit unions are keeping a close eye on these variables and want to make sure they have a business case in place before committing to significant mobile payment investments. The factors that would prompt them to act more quickly and increase their investments include more defined technology and process standards, merchant readiness, increasing competitive pressure from other companies or financial institutions and the emergence of a clear value proposition.
“While FIs are reluctant to invest heavily in mobile payments today, this is the right time to be developing a strategy for the future,” said Erich Litch, division president, digital channels, Fiserv. “Waiting for all the pieces to fall into place before starting to think about mobile payments will leave the door open for third parties to take business away from financial institutions. Taking the time to map out a strategy will ensure that decisions and infrastructures being put in place today will facilitate support a broad range of mobile payments in the near future.”