6. Meeting consumer needs is a powerful driver. Consumers are ready for the “mobile wallet,” suggest the survey respondents. But they say mobile payments must be faster and easier than current payment options, and more ubiquitously available.
7. Merchant acceptance is a stumbling block. But survey respondents believe merchants will accept mobile payments if implementation costs are affordable, costs to serve consumers decrease, and consumer demand is significant.
8. New entrants pose new threats. Nonbank entrants into the mobile payments market (Google, ISIS, and Square Up, for example) put more urgency on financial institutions. One financial institution executive described these entities as “smart people who understand that the evolution is at hand.”
“As third parties aggressively pursue the mobile payments space,” notes the white paper, “it may be time for financial institutions to become more proactive in pushing forward with their own mobile payment strategies.”
9. Choosing partners can be tricky. A multitude of players are jockeying for position in the mobile payments industry. Card associations, payments processors, mobile banking vendors, Internet companies, and telecommunications companies are available to partner with financial institutions in launching mobile strategies.
“When selecting a mobile payments partner, financial institutions should consider how well an organization is positioned to help in both the short term and the long term,” notes the white paper. “Given the mobile payments landscape is still developing, it’s important for banks and credit unions to choose a partner whose goals don’t conflict with those of the financial institution, and that can adapt and grow as business needs and objectives change.”
While most top-tier financial institutions already offer basic mobile functions such as account access, ATM/branch locators, and bill payment, most also plan to enhance their offerings in 2012.
Mobile POS payments are lagging a bit, suggests the white paper. “Leading financial institutions have a solid understanding of what it will take to move these payments forward yet seem to be stuck in a ‘chicken or egg’ scenario—waiting on consumer demand and merchant acceptance before triggering their own investments.
“With competition continuing to mount, stepping up the execution of mobile banking and payments strategies will allow financial institutions to remain competitive in this rapidly evolving arena.”