CTIA Highlights Successes in Mobile Payments and Banking
Jill Morgan
05/01/2007
The biggest news at CTIA for the billing and payment space had to be AT&T’s announcement of its mobile banking initiatives with Wachovia, SunTrust and Regions Financial Corp. The banks will enable customers to check balances and pay bills from their mobile devices using Firethorn’s mobile banking and payments solution. In many situations they will also leverage CheckFree technology for online billing.
Rapid Introduction
What has attracted these companies to Firethorn is that its secure application can be downloaded without requiring changes to the handset. Downloading, however, is only a short term solution until customers receive handsets with built-in banking functionality.
“We have 61 million customers, and we release tens of millions of handsets each year,” said Spencer White, director of mobile financial service and business development of consumer data services for AT&T at the Mobile Payments Conference held in conjunction with CTIA. “By the time momentum picks up, we will be ready,” he said.
Consumers could download the application right now, but White was quick to point out that to promote real adoption, the application has to be displayed prominently on the handset. “If consumers can’t find it, they won’t use it,” White said, so AT&T will embed the functionality in the handset. The banking icon will appear prominently in the tool bar. AT&T also plans to launch a multimillion-dollar marketing campaign at some point this year.
With the accelerating move to mobile banking, security concerns are raised instantly among consumers. “When you link a phone to a bank account, we take that very seriously,” said White. “There is no need for us to launch these services too quickly [beyond mobile banking]. We want to make sure that we don’t have any high-profile events,” he said.
Credit Card Companies Want In
M-payments represents another issue related to banking that has come to the forefront. White points out that the existing credit card market is saturated. Given the growth in debit card transactions and the disruptive nature of lower transmission costs, “card issuers are looking for growth, and they are looking at the mobile industry.” This is a contentious issue though because Visa, MasterCard and the wireless providers will inevitably battle it out behind the scenes over revenue share.
At the CTIA event both companies went to great efforts to downplay this tension. “There are a lot of challenges today. As we extend dialog, these are things that will be worked out over time,” said White. “Much of the industry likes to talk about how the financial industry and the wireless industry can’t get along; I think in the long term that is not going to be the case,” he said.
“Given the striking similarities in the paths our two industries have traveled, it is only natural we have arrived at a moment of convergence,” said John Philip Coghlan, CEO for Visa, in a keynote speech. He believes the convergence of payments and mobile is inevitable. However, Visa and MasterCard were reticent about anything specific.
“These are two giant industries looking at their own services and competing within their own spaces. It takes a while to launch these services, and it is something that is going to have to be managed carefully,” said White.
Encouraging Results in BancorpSouth/AT&T Trial
Survey information was released from a recent mobile banking trial involving BancorpSouth, AT&T, Firethorn and CheckFree. BancorpSouth was an early adopter of Internet banking in 1995. At that time it had 1,250 online banking users. Today 50 percent of its customers use Internet banking. “We would have to invest 35 percent in yearly capital expenses if those customers didn’t have the online self-service capabilities,” says Michael Lindsay, senior vice president for BancorpSouth.
Pioneering again, the bank set out to trial mobile banking services. It was able to leverage its existing relationship with CheckFree for online bill presentment, so trial participants didn’t have to re-enter the information that was already a part of their web-based account. Firethorn provided the payment application.
“We put a banner up on our website, and within days had 250 people sign up for the trial,” said Lindsey. In all, the bank signed 500 participants. Before the trial began, participants stated their expectations: they believed they would be more up to date with finances, save time, be able to use the service anywhere, and it would be easy. By the end of the trial, 75 percent stated that all of these expectations were met. In addition, 50 percent felt they had increased control over their finances.
If the participants were to have access to these services in the future, they said they expected to call the call center 50 percent less often, go to the local bank branch 42 percent less, and visit an ATM 30 percent less frequently.
Email this article
Add a comment
Printer version
Order reprints
RSS Feed
Bookmark article