Six months after concluding one of the industry's first major customer tests of mobile banking, BancorpSouth Inc. is sharing some of its findings and talking about what might be its next major mobile offering: payments.
The company's interest in incorporating contactless payments with mobile banking illustrates the mounting interest from vendors, some of which have been pursuing the two applications separately, to link their software.
Michael Lindsey, a senior vice president at BancorpSouth and its manager of electronic delivery services, said in an interview Tuesday that the Tupelo, Miss., company plans to begin offering mobile banking to customers next month, and that the test group's response to the technology has been very positive.
Coming out of the trial, participants ranked the mobile channel as their second-favorite for banking, behind the Internet; Mr. Lindsey said that one in four reported that the mobile channel had become their No. 1 choice. "We were encouraged by that."
BancorpSouth tested the technology in November and December. It recruited users through its Web site last fall, and within six weeks it had 600 applicants, which it narrowed to 200.
The trial included an even mix of men and women. Most participants were 22-34 years old, but some were as young as 18 and as old as 64. Most had some college education, and a third of the participants had household incomes between $40,000 and $60,000, Mr. Lindsey said. "Most of them identified themselves as cautious adopters."
One key finding "one we weren't expecting" was that mobile banking spurred the use of bill payment, he said. During the trial, BancorpSouth observed a 24.7% increase in participants' logins to its bill-pay site, compared to their use during the 90 days before the trial, he said.
Customers also increased new payees by 12%, he said. Mobile bill payments generally were used for credit cards and utilities, and "we had one mortgage payment made over the mobile device," a strong indicator of customers' confidence in the mobile technology, he said. 
The test also identified a few shortcomings. For example, 75% of participants wanted their phones to have an automated teller machine finder, and 75% wanted to check their credit card balances and transaction histories.
BancorpSouth also wants to add contactless payments, Mr. Lindsey said, and it is already talking to its software vendor, Firethorn Holdings LLC, about developing this for its mobile banking service.
"We want to have contactless payments and near field communications," which would let mobile phones function as payment cards, incorporated into the technology, he said.
BancorpSouth's upcoming service will let people check balances and pay bills. That service "is just the first step," Mr. Lindsey said. "We're very interested in our debit card income and credit card income."
Another mobile banking vendor, mFoundry Inc., announced plans Tuesday to make its software compatible with the NFC capabilities that Vivotech Inc. of Santa Clara, Calif., has been testing in cell phones.
Tripp Rackley, Firethorn's chairman and chief executive, said the Atlanta vendor's long-term plan calls for adding contactless payments to mobile devices. However, he also said that consumer demand for contactless payments would have to increase before it makes sense to embed such capabilities in mobile phones.
"You need to have lots of retailers able to do it and lots of consumers willing to use their contactless card," he said. "People can't visualize it. It's just too early."
However, Drew Sievers, the chief executive and co-founder of mFoundry, said the Sausalito, Calif., company is working to link its mobile banking software with Vivotech's NFC technology, and that he expects to "have something working and functioning by the end of the year."
The partnership is not an exclusive one, so Vivotech is free to work with other vendors. Both MasterCard Inc. and Visa International have tested Vivotech's technology in mobile phones.
Mohammad Khan, Vivotech's founder and president, said he is working with carriers on commercial rollouts of NFC-capable phones, though not linked to mobile banking software. He expects at least one carrier to test the phones in the fourth quarter, and widespread use next year.
"2008 is the year of NFC commercial rollout," Mr. Khan said.
