ORLANDO — Most mobile banking services use browsers and specialized software available for high-end phones, but several financial companies are turning their attention to the basic text message.
Advocates of texting say that this simple format can help banks reach almost any customer with a mobile phone, and that their immediacy makes texts well suited for alerts that can prompt a quick response.
Texting has had a place on bankers' mobile menus since they first began offering financial applications through phones. JPMorgan Chase & Co. has made the short message service the centerpiece of its alert-oriented mobile offerings.
But with a string of deals announced this week, it is clear that texting is gaining traction with banks and vendors.
Scott Thompson, the president of PayPal Inc., said in an interview Thursday that the San Jose unit of eBay Inc. is testing a person-to-person funds transfer service with JPMorgan Chase and students at Ohio State University. The test, which began this fall, lets people initiate transfers between their accounts at JPMorgan Chase with text messages.
PayPal wants to determine what methods people, and especially young ones, prefer for mobile financial services, Mr. Thompson said, and text messaging has emerged as a clear favorite.
"It may not happen for you, but it may happen for your 18-year-old son or daughter," he said.
Fidelity National Financial Inc. announced two initiatives with text components this week. The Jacksonville, Fla., banking technology vendor said Tuesday that it would offer its bank clients a mobile P-to-P transfer service from Obopay Inc., which lets people initiate payments to each other by text message or with a specialized application.
Fidelity expects to have Obopay's systems linked to its core processing software in the first half of next year, and it plans to offer the transfers to its core banking clients, which will be able to put their own brand on the service. Fidelity said it plans to offer the service initially through checking accounts or prepaid cards linked to mobile phones, enabling users to send and receive payments.
On Wednesday, Fidelity said that two of its core processing clients had introduced its mobile banking application: the $1.5 billion-asset Cascade Bank, an Everett, Wash., unit of Cascade Financial Corp., and the $302 million-asset First National Bank of Scotia, a unit of Glenville Bank Holding Co. Inc. in Scotia, N.Y.
Fidelity offers mobile banking services using software from the Novato, Calif., text specialist ClairMail Inc., as well as downloadable applications and browser-based versions from mFoundry Inc. of Sausalito.
(ClairMail and mFoundry have a partnership to jointly market a combined service that offers banks mobile capabilities through all three methods.)
Kishore Bayyapureddy, a senior vice president at Fidelity and the general manager of its e-payments unit, said Cascade Bank plans to offer the text version initially, while First National Bank of Scotia will use the browser version.
Text services offer several advantages, he said; for starters, texting is simple and fast, and it can let people check their balances quickly without scrolling through a series of menus or Web pages.
Mr. Bayyapureddy agreed that young people, who use text messages widely, will find it easy to begin using text-based banking services.
"This will appeal not only to Cascade's existing Gen Y customers, but to new Gen Y customers, as well," he said in an interview.
However, he stressed that texting is just one part of the evolving mobile banking channel.
"We don't want to make a bet on one over the others," Mr. Bayyapureddy said. "We think there's a place for all three modes."
Fidelity plans to integrate the vendors' technology with its own systems, such as those for online bill payment and prepaid cards, and the integration could help banks reach the unbanked or underbanked, he said.
Fidelity has "several hundred" financial companies in its mobile implementation pipeline, Mr. Bayyapureddy said.
PNC Financial Services Group Inc. said Wednesday that it would expand its mobile banking service, which relies on handsets' built-in browsers, by offering a text application using software from ClairMail.
The Pittsburgh banking company said that offering the text service would help it reach more people.
"A mobile banking solution should be available to all bank customers," Thomas S. Kunz, a senior vice president at PNC and its director of payments and e-business, said in a press release. (A PNC spokeswoman said he was not available for interviews Thursday.)
Joseph Salesky, ClairMail's president and chief executive officer, said that text-based mobile financial services hold immediate appeal to bankers, because almost every phone on the market today can send and receive text messages.
In addition, texts are well suited for alerts, Mr. Salesky said, because they enable bankers to reach out to their customers and notify them about actions they may need to take.
"You don't have to wait for the customer to visit you. Mobile is essentially a reactive channel. I receive an alert, and I want to be able to act on it," he said.
"If I want to go online and check my balances or pay bills, I probably will choose the big screen and the full-size keyboard. It is a proactive channel."
JPMorgan Chase has been offering a text-based service since September of last year. Tom Kelly, a spokesman for the New York company, said Thursday that it is looking at browser-based services, though for now its focus is on texting.
The main appeal of text messaging is that everyone can use it, he said. "More people are comfortable using text, because they are texting all the time."
Wells Fargo & Co. introduced a text service last year.
Mr. Salesky said that ClairMail is also developing new text capabilities.
For example, the same "event engine that enables a bank to send mobile alerts to a customer's handset, if, for instance, an account balance drops below a customer-set threshold, also enables the company's GreenPay" mobile bill payment service, he said. "I get a message, I have a new bill. I look at it and, OK, I pay it."
In the next iteration, which is due next year, ClairMail plans to introduce a "conditional messaging" feature that Mr. Salesky called "FreeMoney," which would enable merchants to use text messages to market to a bank's customers.
For example, an electronics retailer could offer a cash discount to a customer who has not visited a store in several weeks. Such offers could be triggered if the customer used a card at a coffee shop near the electronics store, he said.
This would give the bank a way to monetize the data it has on customer behavior, and it could present these offers without sharing customers' personal data with merchants, Mr. Salesky said.
"At the core, it's the same eventing capability," he said.
