At least five partnerships were announced this week aimed at making mobile banking more widely available and more useful, and though payments executives say usage is not widespread now, they expect adoption to soar in the next year.
Giving people immediate access to real-time account details, they say, is letting banks deliver a variety of new services, including fraud-fighting alerts and location-based marketing, and could even help banks justify charging fees when people overdraw their accounts.
Prakash Hariramani, the senior business leader of global product innovation at Visa Inc., said that 4 billion mobile handsets have been deployed to date, enough for more than half the world's population, and banks cannot ignore what has become one of the most common electronic items on Earth.
"This may be the world's first ubiquitous technology," Hariramani said during a session at the Bank Administration Institute's annual Retail Delivery conference in Boston this week.
Visa, of San Francisco, announced Wednesday a partnership with the mobile banking technology company ClairMail Inc., to deliver Visa's alert capabilities through the Novato, Calif., vendor's software.
Banks and credit unions that issue Visa cards and already offer ClairMail's software can now send a variety of account alerts to customers' phones, including immediate notification of transactions. When people make purchases with an enrolled Visa card, they will receive a text message confirming the sale, often before the clerk them hands a paper receipt, Hariramani said. This can be a boon to consumers wary of fraud and to the institutions that serve them.
The alert service can also interact with phones' global positioning systems, notifying banks of users' exact locations and letting companies deliver marketing messages aimed at luring people to nearby stores.
Visa introduced some of these alert features last year, initially for handsets that use Google Inc.'s Android operating system.
Doug Brown, the senior vice president of e-commerce channels, ATM and customer service at Bank of America Corp., said that more than 3.5 million people use the Charlotte company's mobile service, and that the growth rate has been exceptional.
After introducing the service in the second quarter of 2007, Brown said, it took 13 months to attract its first million users, nine months for the second million, and just six months for the third million.
"And this is not showing any signs of slowing down," Brown said. "If you build a convenient and easy to use platform, they will flock to it."
Jim Van Dyke, the founder and president of Javelin Strategy and Research, said that 36 million people have used mobile banking services in this country at least once in the past year, about 18% of the people with phones; by 2014, he said, he expects 99 million people to be using the services, about 45% of mobile phone users.
However, he said banks need to step up their mobile offerings. His Pleasanton, Calif., research firm reports that only 18 of the nation's 40 top banks have introduced mobile services.
"Consumer interest isn't dropping, but bank systems aren't up to the task," Van Dyke said.
That situation could shift quickly, due to another deal announced this week at the conference. Intuit Inc.'s Digital Insight unit has agreed to offer its clients a suite of mobile services from Mobile Money Ventures LLC of San Francisco, a joint venture of Citigroup Inc. and SK Telecom Co. Ltd., the largest wireless telecommunications firm in South Korea.
