Mobile phones have increasingly become tools that consumers use for banking, payments, budgeting, and shopping. Given the rapid pace of developments in the area of mobile finance, the Federal Reserve Board began conducting annual surveys of consumers’ use of mobile financial services in 2011. This 78-page report, “Consumers and Mobile Financial Services” (March, 2015) examines trends in the adoption and use of mobile banking, payments, and shopping behavior and how the emergence of mobile financial services affects consumers’ interaction with financial institutions.
Mobile Banking Aids Healthcare in Developing World
In countries where access to traditional banking services is limited, more and more people are utilizing mobile phones to send money with services such as M-Pesa, which now boasts more than 13 million subscribers. The technology may be a boon to the health field as well, as the same systems can be used by organizations such as the World Food Program, which uses mobile devices for some of its food aid voucher programs.
The application allows a food vender to enter a person’s voucher code into a mobile phone, and the system automatically reimburses the vendor via mobile payment. The convenience encourages retailers to participate in the food program, and cuts paperwork. The same technology could easily be applied to conditional cash transfer programs, which are health promotion initiatives that offer cash incentives to poor families for getting children vaccinated, or sending them to school.
Read more, via PBS NewsHour.
Fifth Third Bank to Offer Mobile Banking with ClairMail Solution
Fifth Third Bank has selected ClairMail to power its new mobile banking technology and services. ClairMail, Inc., a mobile banking and payments solution provider, will provide Fifth Third Bank with a solution to allow the bank’s customers better mobile access to their accounts, bill paying capabilities and real time personalized text alerts, thereby gaining greater control over their accounts and overall finances.
ClairMail’s scalable mobile platform also has the flexibility to allow Fifth Third Bank to connect to multiple financial systems and future-proof their mobile powered offerings.
“At Fifth Third we are committed to providing our customers with the most efficient and secure solutions to satisfy all banking needs,” said Larry McClanahan, vice president & director of digital delivery, Fifth Third Bank. “Due to increased customer demand in this rapidly growing market, we realized the need to adopt a comprehensive mobile solution. After extensive vendor evaluation, we chose ClairMail’s mobile platform to strategically grow our mobile initiative. Now our customers will have extended bank access through a service that goes everywhere and anywhere they are.”
The ClairMail mobile banking solution gives Fifth Third the ability to provide its customers with greater control over their personal finances through mobile web, SMS and a client application on most mobile devices, including the iPhone.
The platform lets customers perform various activities including checking account balances, performing account transfers and viewing transaction history. They will also have the ability to sign up for personalized alerts over SMS, while defining preferences for alert triggers (low-balance thresholds or event occurrences that activate alerts) and frequency.
“Fifth Third is dedicated to providing the highest quality financial products and services to its customers and realized the necessity to utilize ClairMail’s mobile banking and payments platform to provide an effective, convenient vehicle that satisfies customer demand,” said Pete Daffern ClairMail CEO. “Fifth Third’s commitment to an extensible mobile banking rollout demonstrates their forward-looking commitment to improving customer acquisition and retention, reduce costs and drive new revenue opportunities through the mobile channel.”
Source: MarketWire
Mobile Financial Services Provide Banking Solutions to Rural Kenya
Nuru International, a U.S.-based social venture that equips the poor living in remote areas to end extreme poverty in their communities, is using innovative new technologies for mobile banking to increase access to basic financial services for rural households in Kenya. The organization is working with Mifos cloud-based MIS and M-PESA mobile money transfer services to create a viable solution to some of the issues that persist in providing financial services in these difficult service areas.
“One of the biggest problems we face when it comes to finance and banking for the extreme rural poor is how to disburse loans and payments to our farmers, we don’t want to give large amounts of cash to them because they have to cover long distances on foot, have no secure place to keep the cash, and robbery and theft are real concerns.” — Vivian Lu, Community Economic Development Program Manager.
Nuru’s microfinance program has helped extend the reach of mobile money in rural Kenya. The combined technologies of Mifos and M-PESA have helped to create a branchless banking structure, allowing Nuru savings members in remote areas of Kenya access to some of the basic financial services that traditional banks offer. M-PESA is a mobile phone based money transfer service offered through Safaricom, allowing users to transfer money to other users, pay bills, and purchase air time. The service has great potential to be leveraged in mobile banking, allowing people to complete basic financial transactions without needing to visit a physical bank. Mifos is developing integration with M-PESA and allows Nuru an affordable way to scale. Because it’s a cloud-based application, Nuru can access it from mobile phones and netbooks, improving their reach in rural areas.
Nuru recognizes the importance of savings as a critical and often overlooked component to economic growth in rural areas. The Community Economic Development model is a savings-led program that offers financial training. Nuru members are trained in the fundamentals of financial planning, budgeting, saving, and responsible loan management, before they are eligible to apply for individual loans.
Source: PR Web
Merchant Buy-in Is Key to Success of Mobile Payment Growth
Aspiring mobile payment service companies should engage with retailers in determining market requirements to enable mobile phone-initiated payments and services at the retail point of sale.
According to a recent survey from Sybase 365, 40% of survey respondents cited the main inhibitor of widespread mobile payment adoption was a lack of coordination between key stakeholders, including mobile operators, merchants, payment processors, banks and developers. The call for an organized approach to engaging retailers comes from VeriFone Systems, Inc., the leading payment solutions provider in the United States. The company urges mobile payment industry participants to be careful of causing confusion or alienating merchants to the emerging technologies of mobile payment.
“This isn’t just an issue of adding an NFC reader, it requires deep software richness at the point-of-sale to interact with the smartphone and manage a services-based model encompassing new applications and deployments without disrupting operation of existing card systems.”
Responding to growing interest from major industry players intent on claiming a stake in emerging mobile commerce opportunities, VeriFone CEO Douglas G. Bergeron articulated key guidelines to ensure that mobile payments don’t follow the path of previous alternative payment schemes that only succeeded in alienating merchants. VeriFone supplies a large majority of card payment solutions employed in the U.S. by retailers large and small and over the past 30 years has led the way in retail adoption of new payment technologies.
“Emerging mobile payments platforms represent a leap forward in electronic payment transactions, but those who want to claim leadership in this space have to reconcile merchant resistance to the imposition of costs to implement new infrastructure that will be managed an increasingly complex environment,” Bergeron said.
“The retail point of sale represents a point of convergence for smartphone-initiated payments, social networking and electronic couponing, but it won’t happen if retailers are expected, on faith, to absorb the costs of making it work,” Bergeron added. “This isn’t just an issue of adding an NFC reader, it requires deep software richness at the point-of-sale to interact with the smartphone and manage a services-based model encompassing new applications and deployments without disrupting operation of existing card systems.”
Bergeron outlined six key “rules” that industry participants need to adhere to in order to ensure success of mobile commerce:
Rule #1: “Deployment and management of complex NFC technologies will require significant ongoing services from the retailer’s payment systems provider. Until retailers are assured of receiving real value from mobile commerce, service providers who stand to gain from either carrier fees, advertising revenue or transaction charges must be willing to bear the costs of this highly disruptive paradigm shift.”
Rule #2: “Mobile commerce must add value to the consumer. Tapping a phone is a gimmick, no different from tapping a card or fob. In addition to providing the ability to pay for stuff by phone, service providers and retailers need to provide real additional value –- such as coupons, loyalty rewards and discounts — for consumers to leave their wallets at home.
Rule #3: “Mobile commerce must be streamlined with existing POS services and managed well for the retailer. Retailers won’t tolerate the need for multiple methods of acceptance to accommodate what will become a wide array of mobile commerce schemes. All ideas, regardless of where or who generates them, must converge at a unified point-of-sale.”
Rule #4: “Mobile commerce must go from zero to 90 mph in five seconds. Consumers will not embrace mobile commerce without the confidence that it is being widely accepted. If it only works at a few select retailers, it dies a quick death. Ten percent acceptance is not sustainable.”
Rule #5: “Mobile commerce must be integrated with other forms of payment. Mobile commerce won’t lead to the quick death of plastic cards and must work with existing payment systems that are certified by all major processors and installed in the vast majority of large and small retailers.”
Rule #6: “Mobile commerce must be ironclad secure. Security, both real and perceived, is imperative to the adoption and sustainability of mobile commerce. Even minor setbacks in security could compromise consumer adoption and stop the movement in its tracks.
Bergeron’s rules are based on years of experience working with retailers to implement payment technologies and adapt to changing security requirements. As the trusted supplier of payment solutions, VeriFone has the ability to work with retailers and service providers in assessing market requirements and integrating existing infrastructure with complex new technologies required to make mobile commerce work smoothly.
via VeriFone Says Merchant Buy-In Key to Success of Mobile Commerce | Business Wire.
Many Financial Institutions Favor iPhone for Banking App’s, Says Analyst
While Android has made huge strides against the iPhone in terms of smartphone usage,according to Aviva Litan, an Analyst at information technology research and advisory company Gartner, Inc., banks are more comfortable with the iPhone for their banking apps. And even then, she writes, the mobile apps that banks are releasing “offer limited functionality and don’t enable high-risk transactions such as adding new payees for bill payment or new accounts for fund transfers.”
In a recent blog post, Litan writes:
“Most of the financial institutions I work with or use have released iPhone apps but have stayed away from other mobile operating systems and platforms. I asked a few banker colleagues the reason for this, and they told me that; the iPhone development environment is easier to work with, the applications are better controlled in terms of distribution (using the iTunes store), and that they didn’t have the security confidence or appetite yet to develop mobile apps for at least ten operating systems or handset versions (e.g. various Blackberry versions, Symbian, Android) that they would need to support to reach more of their customer population.”
More via Gartner.
Tanzania Working to Revise Mobile Banking Laws
A new law to regulate mobile banking in Tanzania is in the pipeline as part of efforts by the government to enhance compliance in the business. Since the introduction of the mobile banking services in 2008 in the country there was no proper law to guide and regulate the m-banking despite its tremendous growth and dynamism.
And analysts are questioning the strictness of the existing laws and regulations to prevent any possible illicit activity such as money laundering and terrorism financing that might engulf the mushrooming mobile phone-based transactions. According to a senior Bank of Tanzania official, a national payments system bill is expected to be tabled in Parliament for debate this year. Once enacted, the law would boost mobile commerce while ensuring more security.
Unwary Customers Hit by M-PESA Money Transfer Scam Attempts
Not surprisingly, common scams have hit the mobile money transfer services, such as M-PESA. The usual scam involves the receipt of money, confirmed by a fake SMS purportedly from M-PESA. The scammer then says the transfer was a mistake, and asks for the money to be returned, or forwarded to the intended recipient.
Andrew Muchira, who was taking a rest at home received a text message — nothing out of the ordinary, he would have thought. But then it was a message supposedly from M-PESA telling him that he had received Sh8,000 from a certain Mr Waititu. Besides the fact that he did not know anyone by that name, what peeked his interest, was his ‘new’ balance. It was Sh8,000, yet he recalled transacting with his M-Pesa account the previous day and leaving a balance of Sh2,000.
It should read Sh10,000, he thought, then became suspicious — he was being conned, he concluded and decided to play along with the con-man.
via allAfrica.
Barclays Mobile Banking Service Launched
Barclaycard has launched a new mobile banking service as an extension of their current online service platform called mybarclaycard.
The service, available across hundreds of handset models, allows Barclaycard customers can access their accounts, check their balance and view payment or transaction history through their mobile browsers. The site integrates with the Barclaycard Freedom loyalty program to provide access to offers from nearby retailers, using geo-location technology.
The service’s interface provides an web experience designed specifically for mobile platforms, which customers can access by using the same secure login details as their mybarclaycard account.
“As payment experts, our role is to make it easier, more convenient and incredibly secure for people to manage their money while on the move,” said David Chan, CEO of Barclaycard Consumer Europe. “Many of our customers are time-poor or simply don’t want to spend extra time on a PC checking their account. This mobile service allows our customers the flexibility and convenience to manage their finances whenever and wherever they choose.”
“With consumers spending a quarter of their time online connected through mobiles, providing a well designed service is essential to fulfilling our changing customer expectations. The service is a further realisation of Barclaycard’s commitment to provide mainstream mobile banking services by 2012,” added Chan.
Source: Barclays
Widespread Use of NFC Mobile Payments Still Years Away, Says Survey
Sybase, Inc. subsidiary, Sybase 365, has released the results of its survey about leading inhibitors of widespread adoption of mobile payments.
According to the company, 40% of survey respondents cited the main inhibitor of widespread mobile payment adoption was a lack of coordination between key stakeholders, including mobile operators, merchants, payment processors, banks and developers.
“For mobile commerce to take off, industry stakeholders must harmonize their efforts in the same way that led to proliferation of SMS and MMS technologies,” said Marty Beard, President, Sybase 365. “In markets where multiple parties are working together, such as mpass Germany and paybox Austria, we have successful ecosystems where end users can pay for a multitude of goods and services via the mobile.”
While NFC will help further enable mobile payments, successful and established mobile technologies, including SMS and USSD are already leading the development of the ecosystem today.
“Mobile channels such as SMS, browser and apps are already being implemented by merchants globally. The challenge facing NFC is how to make the consumer payment experience significantly faster and easier than it already is.” added Beard.
Among 251 attendees polled at GSMA Mobile World Congress last week, 76 percent believe mobile proximity payments using NFC (Near Field Communication) technology is still at least two years away. Once again the lack of industry coordination (30 percent) was the cited as the main culprit for delayed NFC adoption. Other challenges included lack of NFC readers at point-of-sale (26 percent) and inadequate handsets (25 percent) were cited as inhibiting rapid deployment of mobile payments.
Source: Sybase 365
MoneyGram, Iris Wireless and Globe Telecom to Provide Mobile Phone Load Service in Philippines
MoneyGram, Iris Wireless and Globe Telecom Partner to Provide Mobile Top-Up to Philippines
U.S. consumers can purchase airtime credits for loved ones in the Philippines at any MoneyGram ExpressPayment agent location
MoneyGram International and Iris Wireless announced an agreement to provide global prepaid mobile top-up services that will make it easier for Filipinos living in the United States to stay connected with friends and family in the Philippines.
Per the agreement, MoneyGram will provide load service for U.S. consumers who want to re-load the cell phone minutes of individuals in the Philippines who use Iris Wireless’ partner Globe Telecom as their service provider. MoneyGram is a leader in the payment services industry, and Iris Wireless is a leading provider of messaging services that is connected to more than 850 network operators in 200 countries.
“It also helps Globe extend our reloading channels beyond the traditional sales network.”
International mobile top-up, a complementary service to MoneyGram’s global money transfer business, gives U.S. consumers another way to support those living or traveling abroad by purchasing airtime credits on their behalf. MoneyGram will offer this service through its network of ExpressPayment® retail agents – 35,000 in the United States – including Albertsons LLC, CVS/pharmacy and Walmart.
“MoneyGram’s alliance with Iris Wireless allows our customers to not only pay bills and send money to loved ones; but now they can also help out their friends and family in the Philippines by providing instant credit on Globe Telecom mobile phones,” said Greg Waltz, vice president and general manager of Global Payments at MoneyGram International.
“As demand continues to grow for international prepaid top-up services, Iris Wireless is excited about partnering with MoneyGram and Globe Telecom to provide international airtime minutes home to friends and family members in the Philippines,” said Peter Rinfret, CEO of Iris Wireless.
Unlike in the U.S., where most consumers have contracts for monthly service with wireless carriers, prepaid billing is the standard for most wireless consumers around the world who replenish minutes as they use them.
“As a mobile phone service provider Globe Telecom keeps people connected. This collaboration for international top-up provides us an opportunity to give millions of Filipinos in the U.S. a different way to stay connected to friends and family back home,” said Ferdinand De la Cruz, head of Consumer Sales at Globe Telecom. “It also helps Globe extend our reloading channels beyond the traditional sales network.”
U.S. customers can visit any MoneyGram agent location to purchase airtime credits for family and friends in the Philippines and load credits in various denominations in USD. The cell phone user will receive a text message that their phone has been topped up for a specific amount.
Source: Business Wire