Article
Mobile tech steals show at BAI RD in Boston
PayPal, FIS, Bling Nation and others have placed mobile banking and payments at the top of their priority lists, and they all are coming out with innovative solutions that are getting FI attention.
November 4, 2009 by Tracy Kitten — Editor, AMC
Caroline Coopercontributed to this article.
Spurred by consumers' rapid adoption of iPhone's mobile banking application, mobile banking and the potential for mobile payments is quickly gaining speed among financial services providers.
This week in Boston, at BAI's Retail Delivery Conference & Expo, a number of financial players, including PayPal, made significant announcements about their own moves into the mobile space.
PayPal this week announced partnerships with S1 Corp. and FIS, which last month acquired Metavante, for person-to-person payments on mobile and online channels.
Dan Schatt, senior director and head of financial innovations for PayPal, says rather than competing with banks and credit unions, PayPal is interested in collaborating. Through its partnerships with S1 and FIS, PayPal is facilitating international P2P payments that can be integrated with an FI's banking accounts.
"With FIS, our payment platform is actually integrated with the bank's online banking platform," Schatt said. "It's not third-party, and a PayPal account is not required for the sender. Now, a consumer can pay someone with an e-mail address or a mobile number. The funds are transmitted directly from the sender's bank account, and the recipient retrieves the funds through a PayPal account."
Schatt sees the collaboration as a way for domestic FIs to capture and drive global money transfers — a space that is currently dominated by money-transfer providers such as Western Union and MoneyGram.
"Today, banks only have 3 percent of the market share for money transfers," Schatt said. "This offers them a way to reach unbanked or underbanked consumers, because the payment transaction, when sent to the recipient, can be co-branded for the bank. And with the mobile component, we really see an opportunity to reach the unbanked, since the majority of unbanked consumers regularly use cell phones."
S1 is working with PayPal to spearhead mobile payments, while FIS is working to launch online P2P payments. But Schatt says both companies plan to integrate PayPal's P2P payment platform across both channels.
Another payment application that got some attention at RD, as well as at last month's ATM, Debit & Prepaid Forum in Las Vegas, is the Bling Nation payment-tag solution. Although not exactly mobile, Bling Nation is pushing its tag technology as a way to promote mobile payments. As a closed-loop application, FIs and retailers in a single community that sign up for the service are connected to Bling's payments platform. Payments are made with a tag that is affixed to a user's mobile phone. A purchase is made with near-field communications, facilitated by the tag. The tag is attached to the user's mobile device and read by the merchant's POS device.
Once a purchase is made, the transaction is verified with the user via SMS messaging to the mobile phone.
Shannon Goldman, vice president of sales for Bling, says Bling Nation sees the tag as a gateway to more integrated mobile payments.
"We want to create a habit for consumers to use their mobile devices to make purchases," she said. "The tag could be affixed to anything; but if not attached to a mobile device, it diminishes the value of the text message that is received at the end of the transaction. We want to get consumers in the habit of thinking about the phone first and the card second."
Other mobile tech on the floor
In addition to its launch of a mobile banking program designed for FIs, mobile banking provider ClairMail announced a deal with Visa that will integrate the card network's mobile services into ClairMail's mobile banking platform.
According to ClairMail, banks and credit unions can access Visa's mobile services, including applications that support mobile payments, tailored merchant offers and near real-time transaction alerts and notifications. ClairMail's mobile-banking platform already offers users banking and payments functionalities via SMS, e-mail, mobile Web or smart card applications.
Tim Attinger, Visa Inc.'s head of product innovation, says the deal between Visa and ClairMail underscores the growing importance of mobile banking.
"Mobile devices are quickly becoming an essential financial-management tool for consumers around the globe," Attinger said. "Integrating Visa mobile services into ClairMail's platform will help consumers better manage their Visa accounts, and has the potential to speed the deployment of these services for Visa issuers."
Other companies have been busy on the mobile-banking front at BAI RD this week, as well. Firethorn Holdings LLC, a Qualcomm company, announced a partnership with CashEdge to launch and integrate mobile P2P payments as an addition to Firethorn's Mobile Wallet solution and CashEdge's POPmoney P2P payments service.
Like PayPal's solution, the Firethorn solution enables users to send electronic payments with e-mail addresses and mobile phone numbers.
On the show floor, Firethorn's Dave Vigil, a senior vice president with the company, said a number of Firethorn's partner FIs expressed interest in working with CashEdge, which later prompted discussions between the two companies.
"Qualcomm (Firethorn's parent) for years has always said that, as the cost of the devices go down and the power of the devices goes up — the screens, the keyboards, the battery life — that people actually will have no reason to go to the PC," Vigil said. "Whether it's for airline reservations or ticketing to a concert or mobile banking, anything that you do on your PC is absolutely going to end up on your mobile phone."
Vigil says Firethorn has further enhanced the Mobile Wallet solution by adding mobile-enrollment capability. Previously, users had to be online banking customers to enroll in the service. That's no longer the case. And the company has plans to extend the Mobile Wallet's functionality to support retail loyalty and rewards programs in the near future.
"We're convinced that consumers, if given a choice, will use their mobile wallet just like they do their non-digital wallet," Vigil said.
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