Most American financial institutions have clear-cut strategies for mobile banking but say the market will need to mature further before they make any sizeable investments to support mobile payments, research from financial services technology provider Fiserv reveals.
A survey conducted for Fiserv by Forrester revealed that banks and credit unions have clear long-term mobile banking strategies, but very few have mobile payment strategies in place. This, Fiserv says, is leaving them at risk of falling behind other companies that are rapidly entering the space.
“Mobile payments were a hot media topic in 2010, but not all mobile payments are created equal. In 2011, bill payment and transfers via mobile devices will undoubtedly increase as availability and utilisation of mobile services grow,” says Brad Strothkamp, a principal analyst at Forrester. “Contactless payments will not have the same success… these types of mobile payments have major impediments to success, including technology, merchant, consumer and issuer issues.”
Meanwhile, the report says factors that would prompt banks and credit unions to act more quickly and increase their investment include more defined technology and process standards, merchant readiness, increasing competitive pressure from other companies or financial institutions and the emergence of a clear value proposition.
“While financial institutions are reluctant to invest heavily in mobile payments today, this is the right time to be developing a strategy for the future,” says Erich Litch, president of digital channels at Fiserv.
“Waiting for all the pieces to fall into place before starting to think about mobile payments will leave the door open for third parties to take business away from financial institutions. Taking the time to map out a strategy will ensure that decisions and infrastructures being put in place today will facilitate support a broad range of mobile payments in the near future.”
The white paper is available to download at Fiserv’s website.