In yesterday’s MobileFI blog post, we cited a recent report from Javelin Strategy & Research, “Mobile Banking, Smartphone and Tablet Forecast: 2011‐2016”, which projected that over half of U.S. adults (111 million people) will be mobile banking by 2016 and that small FIs are lagging behind in mobile.
The report had other interesting findings as well:
- Mobile banking grew 63 percent from 2010 to 2011, fueled primarily by large financial institutions (FIs).
- Fifty percent of smartphone owners currently use mobile banking, compared to 14 percent of feature phone users, showing how a full mobile banking strategy including applications, mobile web and SMS are most effective.
- Overall, mobile web was the top way consumers accessed mobile banking, with 62 percent of respondents having used the channel.
- The story is different at large FIs, however, as 70 percent used SMS, 62 percent used mobile apps and 46 percent used mobile web.
- 12 percent of smartphone owners who do not currently use mobile banking said they planned to do so in the next year.
- Approximately 50 percent of tablet owners said they had used their device for mobile banking in the last 90 days, and one-third had used mobile banking in the past week.
“There are always barriers with financial institutions setting up mobile banking solutions, but once a bank gets it, it clicks,” said Mary Monahan, executive vice president and research director of mobile at Javelin.
EMI recently analyzed the 4Q11 financials from both JPMorgan Chase and Wells Fargo. Their analysis underlined the extent to which mobile banking has emerged as a key banking channel, while concurrently indicating that online penetration may have reached a ceiling.
- Between 4Q10 and 4Q11, Chase grew its active mobile banking customers by 57%, while during the same period active online banking customers increased by 3%.
- Active online banking customers as a percentage of total Chase checking customers rose from 62% in 4Q10 to 65% in 1Q11, but has remained at 65% for the three subsequent quarters. Active mobile customers as a percentage of checking customers rose from 20% in 4Q10 to 32% in 4Q11.
- Active mobile customers as a percentage of active online customers rose from 32% in 4Q10 to 48% in 4Q11.
- The rate of growth in active mobile customers does not yet show signs of abating. The quarterly growth rate fell from 13% in 1Q11 to 9% in 2Q11, but then increased to 10% in 3Q11 and again to 16% in the most recent quarter.
ABI Research polled 2,000 consumer technology users and asked about their mobile shopping habits. The results show that almost 50% of smartphone owners have shopped in the past or intend to shop in the future using their mobile phones. The survey also revealed that 53% of the respondents use their smartphone for mobile banking.
More surprising is the result that 17% of non-smartphone owners are interested in mobile banking, even though their current handset would not easily support it. Couple this rise in mobile shopping and mobile banking with NFC technology and you know why those involved in mobile commerce are doing a happy dance.
Mobile commerce, especially here in the U.S., is a market that’s in its infancy. As recent as 2008, making a retail purchase using your smartphone was nonexistent. Only a handful of sites were mobile-friendly and most did not support payment transactions. I can remember trying to make a purchase on my cell phone via its web browser and it was a hair-pulling experience. The app store was a brand new concept and shopping applications for your handset were few and far between.
The New Year may see an explosion of internet users turning to mobile applications to pay their bills, buy music, books and even book holidays, as well as conducting in-app payments, according to predictions announced yesterday by a major mobile analytics firm.
Bango has published a brave forecast, suggesting that revenue derived from mobile application payments will increase by an astounding 600 per cent next year.
Part of the reason for this dramatic reason has to do with an anticipated rise in tablet sales, as well as many more mobile users deciding to trade in their old devices for smartphones. Some analysts suggest that publishers and other content creators could be the real winners if mobile payments really do take off in 2011.
Publishers will be able to track what type of online content sells best amongst mobile users. Publishers can then adjust their pay-per-view videos, music and articles, in order to better address the public’s needs and interests.
Discover Financial Services, the payments processor whose stock has outgained its three bigger rivals, may get another boost after the largest U.S. mobile carriers chose its network for a new venture, analysts said.
“This is a solid move for Discover in the U.S. mobile- payments space and this is value-enhancing to its network and possibly the company’s shares over the intermediate to longer- term,” wroteSanjay Sakhrani, an analyst with KBW Inc., in a research note today.
AT&T Inc. and Verizon Wireless are leading a venture to create Isis, a mobile-commerce network that would let people make purchases by waving smartphones near “contactless” readers in stores. That could threaten Visa Inc., MasterCard Inc. and American Express Co., whose fees and merchant contracts have faced increasing scrutiny from regulators and lawmakers, which Riverwoods, Illinois-based Discover has largely avoided.
Mobile payments in the U.S. may climb to $214 billion in 2015 from $16 billion this year, saidGwenn Bezard, an analyst with Boston-based consulting firm Aite Group LLC, in a report today.
Smart Communications, Inc. (Smart) yesterday said that it has rolled out its mobile commerce services to close to 50 remote rural communities under its Island Activations Program (IAP).
IAP is an initiative which aims to provide mobile based financial services to remote communities that have limited or no access to banking services.
Smart said that it has set up Smart Money Centers in remote, underserved communities, to spur entrepreneurial opportunities and economic growth.
These Smart Money Centers will allow island-based micro-finance institutions (MFIs) to perform money transfers using Smart Money–the world’s first reloadable payment card linked to a mobile phone.
Aside from mobile money transfers, the IAP enables island residents to perform e-load purchases, bill and utility payments and other micro purchases, all via mobile.