LAS VEGAS -
Is the turn-of-the-century hype finally coming to fruition in mobile payments?
Several experts at BAI's recent Retail Delivery Show suggested as much, and numerous announcements related to mobile payments were made during the show. Two major players announced mobile payments deals during the show, and other smaller players indicated they will be providing supporting roles. Driving the hype around mobile payments is the combination of Gen X/Gen Y consumers comfortable with using cell phones for transactions, and technology that is much improved over earlier releases.
Leading the way was CheckFree, which is expanding its OpenChannel strategy for mobile banking and payments. That strategy includes support for multiple technologies, including microbrowser-based wireless application protocol (WAP), text messaging (also known as SMS), and device-resident applications. Meanwhile, ClairMail and mFoundry said they had entered into a partnership to offer what the companies dubbed a "triple play" of mobile user interfaces-messaging (SMS and e-mail), mobile web and client applications. The companies said they will co-market and sell an enhanced, combined solution which integrates ClairMail's mobile banking and payments platform and applications with mFoundry's Spotlight client-based application.
Dave Milz, president of Troy, Mich.-based Galaxy, said his company has felt a "lot of push from mobile banking" from credit unions, and that it is projecting one-third of its current home banking users will be wireless banking users within three years. Similarly, Anthony Jabbour of Fidelity National Information Services (FIS) in Maitland, Fla., said it has been working with several providers, including mobile solutions provider FireThorn (the partner with CheckFree) on a mobile solution of its own, and it is also building a WAP-based solution.
Eight Years, No Progress-And Now...
"Eight years ago mobile banking was the phrase," noted FIS' James Susoreny. "And in those eight years there was no progress. Finally, we are seeing today that mobile banking is living up to the press. The cellphone providers themselves need to settle on standards, as they have in Europe years ago so the banking providers can develop standards."
Also recently announcing partnerships to offer mobile banking solutions was Open Solutions, Glastonbury, Conn., which is partnering with MShift.
Checkfree is part of a partnership with AT&T in which the phone giant has launched what it called an easy-to-use mobile banking platform that will enable consumers to view account balances and history, transfer funds and pay bills from their AT&T mobile handsets. The new platform is initially available to customers of Wachovia and SunTrust Banks and is based on mobile banking and payment platforms from Firethorn Holdings and Checkfree. The mobile banking application will be pre-loaded on future AT&T handsets beginning later this year. "Because the mobile solution is embedded on the handsets, it is easy for users to locate the mobile banking icon in the applications folder on the device and access the service," the companies said.
Since November of 2006 CheckFree has been focused on the device-resident, downloadable application. Among those participating in the program is Utah-based America First CU.
'Ready For Prime Time'
Alex Hart, EVP and general manager of CheckFree's Electronic Banking Services Division, told Credit Union Journal that credit unions should recognize that mobile payments "is ready for prime time this time. In the 1990s we tried to create a market that did not exist yet. There was no bandwidth, costs were high and it was incredibly complex. Today, it's a lot simpler."
Hart advocated the resident application over the WAP model. "WAP is low-cost, low-hurdle, but it's also a relatively poor user experience compared to the downloadable application," he said.
Hart added that the iPhone, which is also available only with an AT&T plan, is helping to drive the move to mobile payments and will be the model for all "in five years."
Like other analysts, Hart said credit unions have no choice but to embrace mobile banking now if they wish to capture younger consumers as members. "Credit unions have seen a loss of young people. People below a certain age expect it to be there," he said. "You need to meet them where they live, and this is where they live. It's not just a phone it's a communication device."
What consumers want and expect, said Hart, is a mobile banking experience similar to a home banking experience, what he described as a financial services version of "Trip Advisor."
"A fair number of credit unions have been happy with 'good enough,'" Hart suggested. "This might be the one thing that helps get them over the hump. Expectations are being set by everyone else in the online world."
With the new mobile banking solution CheckFree hosts the application in its data center, and has overcome some initial operational speed bumps, according to Hart. (c) 2007 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
