Banks May Find Holding Back On Mobile Payments Costly

by Mercator Advisory Group 0

According to a white paper just published by Fiserv, banks that are not ready to move quickly when the mobile payments market takes shape will be at a competitive disadvantage compared to the early movers. The white paper was based on a survey of 15 major bank and credit union executives on their mobile banking and mobile payment strategies.

The majority, 86 percent, of the surveyed executives 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.

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.

In analyzing the survey’s findings, Fiserv warns in its opinion piece that banks should avoid waiting because mobile payments represent a clear growth market. “Mobile carriers and other third-party players are aggressively pursuing the space, consumers have a growing affinity for mobile-payment options, and the long-term return on investment could be considerable,” the company noted in its report.

Most bankers have seen hockey stick growth projections before including similar claims for mobile banking which took almost 10 years before the promised growth curve materialized in 2010. The financial turmoil of the past few years has added a bit of caution to already skeptical bankers. While today we are much further along in the adoption of mobile technologies, the adoption scenarios for new payment systems are notoriously difficult to predict because of the chicken and egg challenges of merchant and consumer adoption of new payment methods. In this case the chicken and egg are now in the fire but the heat is still on low.

For more information on the other conclusions reached in the white paper read the full article in USBanker: http://www.americanbanker.com/bulletins/-1035913-1.html

For more information on mobile payments read these Mercator research reports
“Payment Technology 2011: Mostly Mobile, Platforms, EMV and What to do About Debit?” ttp://www.mercatoradvisorygroup.com/index.php?doc=Emerging_Technologies&action=view_item&id=565&catid=5

“Coming to a Phone Near You: A Look at NFC and What the Isis Payment Network
Portends for Card Brand Competitors”
http://www.mercatoradvisorygroup.com/index.php?doc=Emerging_Technologies&action=view_item&id=585&catid=5

“US Person-to-Person Mobile Payments Market: Gee Whiz or Gee Why?”
http://www.mercatoradvisorygroup.com/index.php?doc=Emerging_Technologies&action=view_item&id=564&catid=5

“EMV in the USA: Waiting on Debit, a Mandate, or Just the Opportune Moment”
http://www.mercatoradvisorygroup.com/index.php?doc=Emerging_Technologies&action=view_item&id=557&catid=5

“The ISIS Mobile Payments JV: NFC’s Breakout Opportunity May Be Balkan Gardens” http://www.mercatoradvisorygroup.com/index.php?doc=Emerging_Technologies&action=view_item&id=543&catid=5