Verizon Wireless is expected to announce today a deal to deliver phones to customers preloaded with mobile banking software from Firethorn Holdings LLC.
The Verizon agreement is the second for Firethorn and gives it favored status with the nation's two biggest mobile carriers. The Atlanta company had already won a commitment from AT&T Corp. to load its application on that carrier's handsets.
Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, already allowed its customers to download the Firethorn application, and those of competitors, to their mobile phones. But Thom Russell, the director of business development in its consumer products unit, said few people actually went to the trouble to do so.
Tripp Rackley, Firethorn's chairman and chief executive, said in an interview Friday that AT&T will begin selling the handsets with the Firethorn application next month.
AT&T and Verizon together control 60% of the cellular communications market, said Mr. Rackley, who predicted that the carriers' support would encourage more banks to adopt his company's technology.
"You are now on the strategic platform," Mr. Rackley said. "Verizon's decision very much changes the market."
Mr. Russell called the agreement "a landmark for Verizon customers."
Firethorn has a strong background in financial services, he said, and "the application that they have we saw as being able to provide a very rich experience to our customers and provide a single-wallet approach."
Firethorn's application lets customers view multiple accounts on a single handset screen, even accounts with different institutions, as long as both banks use its system. At a conference in New York this month sponsored by Online Financial Innovations, publisher of the newsletter Online Banking Report, Firethorn representatives demonstrated that feature using accounts from two of its clients, Wachovia Corp. and SunTrust Banks Inc.
Neither Firethorn nor Verizon would say when the preloaded application would be available, but Mr. Russell said the company would begin shipping some models "in the very near future."
AT&T, of Bedminster, N.J., had already agreed to preload the Firethorn application. It plans to begin a marketing push in November to promote mobile banking in conjunction with Firethorn's bank customers, which also include BancorpSouth Inc. and Regions Financial Corp.
There are two models for delivering mobile banking technology: through a dedicated application that must be preloaded on, or downloaded to, a phone, or through the built-in browsers that can work with any phone with Internet access.
Red Gillen, a senior banking analyst at the research and consulting firm Celent LLC of Boston, said the marketing clout of the telecom giants would help raise awareness of mobile banking, and having the application on the phone will improve its "discoverability" by the customer.
"Having their application on the phone gives Firethorn an advantage over other vendors," Mr. Gillen said. Though very few customers are using mobile handsets for banking, "right now distribution is the most important issue for the banks," he said. "You've got to get something out there."
Richard K. Crone, the founder of Crone Consulting in San Carlos, Calif., agreed that "the carriers are definitely a force to be reckoned with. They are one of the major stakeholders in this, and they are trying to stake their claim."
But he said advances in mobile devices, such as Apple Inc.'s iPhone, might tilt the market in favor of mobile browsers, the approach taken by Bank of America Corp. "B of A's mobile Web site loads instantly and works flawlessly, even over the Edge network," AT&T's low-speed data network, Mr. Crone said.
The carriers say that the high-profile visibility of having an application "on deck" on the handset's home screen provides a powerful advantage.
Spencer White, AT&T's director of mobile financial services, compared mobile banking to mobile e-mail. The company provides a centralized e-mail application that enables users to access popular Webmail services, such as those offered by the Internet portals Yahoo, MSN, and America Online.
By centralizing e-mail access through a single application, AT&T had a tenfold increase in user adoption, and a twentyfold increase "when we put it on the top menu," Mr. White said at a May conference sponsored by the Federal Reserve Bank of Chicago. "This is a front door for your money."
The carriers' interest is in providing additional services to drive increased customer use of their data services and with it more revenue, Mr. White acknowledged.
But benefits flow the other way as well; BancorpSouth, of Tupelo, Miss., one of the first Firethorn banks and the one that is probably furthest along in its commercial rollout, reported a 25% increase in bill payment at its Web site from users who used their mobile devices to access their accounts, Mr. White said at the time.
