This week InformationWeek hypes mobile banking and mobile payment – suggesting that the time has finally come for mobile financial services. The article outlines mobile account access recently introduced by Citibank, BofA, and Wachovia – and applauds the utility of simple on-the-go transactions such as checking balances, transfering funds, locating ATMs, and one click calls to customer service, but questions the necessity of bill payment and other more complex transactions from a phone.
The article concludes with a brief discussion of payments using your cell phone and efforts driven by MasterCard and Visa to generate a market for contactless payments via near field communication. For now, these efforts remain bogged down in the complexity of parcelling out the business model's benefits between financial institutions, cell phone carriers, and payment networks.
However, Mercator Advisory Group recently published a research report suggesting that the time has indeed come for US mobile banking and payments and suggests that business models have evolved to include sufficient fee revenue for all key participants. I remain skeptical, but time will tell. In the meantime, here are Merctor's projections:
- Mercator Advisory Group forecasts mobile banking fee revenues available to the mobile ecosystem of banks, mobile operators, vendors and networks to exceed $1B in 2011.
- Mercator Advisory Group forecasts mobile payments volume to exceed $6.9B in 2011.
- The evolving business models leave fee revenue on the table for mobile operators, banks and their vendors. For mobile operators, mobile banking drives minutes of use and multiple fee opportunities. For banks and payment networks, services fees and switching charges are available. For the first time, at least some of the interests of every element in the mobile ecosystem are served.
Your Phone As Financial Central
By Elena Malykhina
April 9, 2007
US Mobile Banking and Payments: Finding the Seams, Accelerating the Pace
MERCATOR ADVISORY GROUP