Mobile News

The degree to which banking services will be compromised by non-banks can be gauged by the extent to which components of banking infrastructure have already outgrown bank control. For example, in the USA, more than two thirds of credit accounts are handled by non-banks. As for the specific question of m-payment development it is worth noting that although banks derive only a small portion of revenue from offering such services (payment revenue accounts for only 7% of the top 25 US banks’ operating income), payment-driven revenue is very attractive. For, example, there is interest foregone by customers if funds are kept in current accounts to service debit card, cheque and ATM transactions. Current accounts pay less interest than deposit accounts and the interest foregone means increased revenue for the bank.

However, the limited success of bank-led e-purses (infrequent usage) does not suggest an obvious domination of the mobile channel. Indeed, mobile services can be seen to form part of banks’ overall strategic considerations: the pressure to provide a seamless channel mix supersedes any vaunting of mobile banking as a catalyst for channel substitution. This is evident in UK-based Lloyds TSB’s recent partnership with Prime Response to provide eCRM. Indeed, the mobile channel encourages innovative brand building: Abbey National offers WAP services via its own brand (in conjunction with Orange) and its internet brand Cahoot (in conjunction with BT Cellnet)–two closed models are deployed to increase visibility of their respective brands. Some banks have approached the mobile channel with more than cautious consolidation in mind–Merita NordBanken has launched an inter-Nordic WAP payment service while UK-based Woolwich includes a mortgage calculation service as part of its Open Plan WAP services.