Financial institutions that are taking a wait-and-see approach to mobile payments risk falling behind early investors as the market begins to take shape, according to research published by Fiserv Inc.
The Brookfield, Wis., technology company commissioned the independent research firm Forrester Research Inc. to survey by phone 15 executives from major U.S. banks and credit unions in October.
The majority, 86%, said they had clear-cut mobile banking strategies, the survey found. But mobile payments remained in the background as most chose to sit back and watch the market develop. The results were released Monday.
Nearly all of the respondents indicated they were waiting to see the emergence of more defined mobile payments technology and process standards, increased competitive pressure and a clear value proposition before investing.
Lack of more defined technology appears to be the primary obstacle preventing financial institutions from investing more capital in mobile payments, Brad Strothkamp, Forrester principal analyst for e-business and channel strategy, said in an interview.
"Banks are saying when the dust settles, we'll be there. But we can't code to four different standards," such as near-field communication and bar codes, he said.
Instead of investing in mobile payments, banks are investing in "lower-hanging fruit" such as mobile banking and are solidifying that area with features such a remote deposit capture, Strothkamp said.
Banks essentially are split concerning their market role in mobile payments, according to the survey data. At least seven participants saw themselves as a driver of mobile payments, while six others viewed themselves as a facilitator of the payment method.
Banks appear to be more focused on mobile bill payments and mobile person-to-person payments than on remote payments conducted through social media sites and payments at the point of sale. "This is likely because mobile bill payment and person-to-person payments are more closely aligned with financial institutions' existing core competencies," Fiserv said in the report.
Of the 15 banks involved in the survey, nine indicated NFC payments at the point of sale were a low priority in their mobile payment strategy.
Asked what their investment level would be in mobile payments in the next 12 months, two banks indicated none, six said it would be low, five said medium and two said high. "For the most part, financial institutions are waiting for others to set the pace for mobile payments," Fiserv said.
The majority of surveyed financial institutions indicated they were struggling to build a business case to support mobile payments and were awaiting market changes to dictate any additional investment.
Bank executives expect that merchants ultimately will drive consumer adoption of mobile payments, the survey found. "Merchants will have to meet customer expectations," one unidentified respondent said.
