Mobile payments are becoming a reality for most people who use a mobile banking application. Check deposit is used by 25% of active mobile banking end-users. Taking pictures of bills to make payments is also a popular app feature, with 10%-12% of active users utilizing Picture Pay every month. Payments are certainly alive in the mobile channel.
There are currently 5 great examples of real people making payments inside mobile banking. We already mentioned two (2), depositing a check (Mobile Check Deposit) and taking a picture of a bill (Picture Pay). The third is paying friends using mobile banking by making what is referred to as a Person-to-Person or P2P payments. Fourth is managing your debit card in your mobile banking application (we refer to this as Card Management), which allows an end-user to turn the card off so it can’t be used, then back on when they need to use it. And last, or fifth, we have mobile banking marketing programs (i.e. loyalty or rewards programs) happening in the app. These kinds of cool marketing programs feature offers from local merchants, driving traffic to businesses and increasing debit card usage for community financial institutions. This builds stickiness within the app and stronger communities by rewarding captive audiences who visit local businesses. It is the perfect blend of a local credit union or bank showing its greatest strength, connection to the local community.
Those examples above are all real and in production today. Everyone seems to be focusing on eWallets and may be forgetting to get the basics done as we all await the eventual coming of the eWallet. eWallets are not a reality today beyond Apple Pay, which does not require you to build anything for Mobile Banking. What is a reality is implementing innovative ePayments solutions that exist right now.
These mobile payment features can be surrounded by cool, innovative new technologies that help secure the channel and the payment. One of my favorites is the general topic of biometrics. How can we use biometrics to better secure the mobile and desktop channel? Are the technologies viable? Can we get them to work on enough devices to be relevant? The good news is yes, the technologies are maturing enough to be able to be implemented today. Touch ID is a great example, albeit, only usable on a limited platform. Imagine using Touch ID and biometrics to further secure a remote check deposit transaction allowing for greater management of the risk around depositing checks via the remote channel. That is already in production today. It even works on a very limited set of Android SmartPhones that support fingerprint technology. Other biometric technologies, such as voice recognition, are also becoming cost-effective enough to be considered. In all of these cases it is really exciting because security is enhanced. The big win is for the end-user, who can experience a channel that is easier (and cooler) to use and yet also more secure, thus enabling a greater flow of payments overall.
It is an exciting time for mobile payments and payments in general. Mergers and acquisitions continue at pace. Just recently, a well-established provider of eWallets, Paydient, was purchased by PayPal. This is a sign of two key manifestations:
1. Consolidation and momentum are simultaneously happening to make eWallets a reality.
2. There will be multiple wallets in the future, not a single wallet to rule them all but a fractured market where community banks and credit unions can have a wallet directly embedded in their mobile banking application.
Mobile payments are happening everyday. They are becoming one of the big drivers in the development of the mobile banking channel. Mobile payments are an exciting way to engage end-users and train them to think of the bank/CU as the provider of innovative mobile payments solutions.