Why Banks Should Be Watching Nintendo's Moves

While banks struggle to get consumers to use Near Field Communication-enabled phones for mobile payments, the video game industry is having blockbuster success with NFC technology.

Nintendo built an NFC reader into its Wii U video game console, which launched in late 2012, and the company announced this week that it will finally put its NFC capabilities to use through a series of NFC figurines that interact with its most popular games.

The figures, called "amiibo," resemble hit toys like Disney Infinity and Activision's Skylanders, which are sold as physical embodiments of game characters. To play as a character such as Disney's Buzz Lightyear, players take a figurine and place it on a special reader. The character then comes alive in a game, and the figurine stores any progress the player makes.

Skylanders, the original implementation of this concept, is a runaway success. The franchise has exceeded $2 billion in worldwide sales by early 2014.

So what, if anything, does this mean for payments?

It may mean that banks and mobile wallet providers are focused on the wrong audience. Getting adults to change their lifelong payment habits may not be as easy or as fruitful as focusing on a younger audience that, for the past few years, has grown up with NFC.

Obviously, this doesn't mean banks should start building payment capabilities into Super Mario and Mickey Mouse toys. But it does mean that the concept of an NFC transaction will come a bit more naturally to a younger person, so perhaps the focus of mobile payment initiatives should be student accounts or Internet-only banking relationships, which would reach a more tech-savvy customer.

American Express has probed this market over the years, with products and marketing tied very closely to popular games like League of Legends and Halo 4. In mobile payments, Amex has had success signing up customers for its Serve prepaid card through the Isis mobile wallet, which relies on NFC technology.

AT&T, Verizon Wireless and T-Mobile, the carriers behind Isis, sign up new users for their mobile wallet whenever they sell new Isis-compatible phones. As part of this process, the carriers' sales staff also offer to sign up consumers for Serve, helping Amex reach a new market of young, tech-savvy mobile phone users. Over half of Serve's customers are under the age of 35, and a third of Isis customers have an income of less than $50,000, according to American Express.

There are likely more opportunities like these for card issuers and other companies to pursue. Perhaps branch staff can do what Isis is doing, and enroll younger customers for a mobile wallet when they sign up for their first student account.

But if banks instead ignore this opportunity with younger consumers, it might be game over for mobile payments.