For the second time in roughly 80 years, the people of the United States have come to see their banking system in a new and not so flattering light. But apart from the doom and gloom of the current financial crisis, another new light is shining on the banks. It’s called mobility.
Banking, in the form of remittance, money transfers, bill payments, commerce and other financial transactions, quickly is going mobile thanks to driving forces across the financial and credit communities, software providers, e-commerce companies, device manufacturers and mobile network operators. And, oh yes, there is a growing willingness on the part of consumers to engage in mobile commerce using their wireless device of choice.
Recent research conducted by MQA Research and commissioned by Fiserv, an information technology service provider to the financial industry, shows that 75 percent of consumers surveyed in April were willing to conduct mobile banking services. That’s a 26 percent jump from two years ago. Not surprising, the 21-to-34-year old demographic was even more emphatic. Eighty-three percent said they were willing. An even higher percentage were willing to receive alerts and messages from their financial institution regarding password changes and other account activity.
This week, the influence of survey data was topped by Visa’s announcement that it is developing an application for Android-based mobile phone devices. Android is the operating system and software platform developed by Google and the Open Handset Alliance for mobile devices. Visa’s application will allow Chase Visa cardholders track account transactions and receive offers on their mobile devices.
Along with the Visa announcement, Sprint Nextel Corp. released free mobile banking software on an mFoundry platform, which will run on a variety of Web-enabled handsets. With the MyMoneyManager application, Sprint customers with accounts at BB&T, Citibank, IBC Bank and PNC Bank can send payments through PayPal, access multiple accounts, make payments, send cash to friends and transfer money. Sprint is the first mobile operator to enable PayPal on the wireless handset.
Juniper Research issued its forecast today that more than 100 million mobile users globally will be making international money transfers by 2013. For companies providing national and international money transfers, the market will exceed $5 billion by then. Seventy-five percent of those transactions will come from three regions: Western Europe, North America and Africa & the Middle East.
Howard Wilcox, the author of the Juniper report, said the mobile phone will become a vital enabler in developing countries because more people have phones than bank accounts.
To help move these markets along, the global microfinance resource center known as CGAP (Consultative Group to Assist the Poor) made a new four-year commitment last week to identify, fund, research and champion technology that enables banking services for more than 25 million people across 20 countries. CGAP will provide $10 million to microfinance groups, banks and mobile phone providers to find business models that succeed in this endeavor. The Bill and Melinda Gates Foundation has co-funded this work since 2006.
