By Glenn Wheeler, president, Viewpointe Clearing, Settlement & Association Services
The payments landscape has been transforming. Jockeying for position are some major non-banking players – social networking sites, peer-to-peer payment services, mobile phone providers and credit card companies. As the competition heats up, the time horizon for establishing supremacy in the market will get shorter and shorter.
Some believe that banks, long the dominant facilitator of payments, will have problems reacting and adapting to this new paradigm. Certainly the evolving payments market presents new challenges for banks, but the situation might not be as dire as some have predicted.
There is no question customers are demanding convenience. According to a recent Bank Systems & Technology article, “Mobile Payment Users Expected to Surpass 375 Million by 2015,” market research firm In-Stat predicts that the number of mobile payment users globally will triple by 2015. Where will this demand be met? Well, there are a multitude of channels for customers to gain access to mobile payments; many do not require a financial institution. Consumers have many options: there is “virtual currency” offered by social networking mobile apps such as Facebook, "tap and pay" apps via smartphone using near-field communication (NFC) offered by Google and telecom providers, and mobile peer-to-peer services from PayPal, among others. Undoubtedly, there are additional mobile payment channels being innovated as I type this.
Banks are keenly aware of the risk mobile payments pose to a key part of their business. However, it is the security component of mobile payments that deserves a second look. Security is a differentiator and one in which non-bank providers may have a hard time competing with the banks. By developing capabilities for payment transactions that bypass financial institutions, thereby circumventing the advanced systems that help secure and oversee transactions, consumers could be at risk. Naive consumers might falsely believe that they have the same type of security and protection that they do with their bank. From an individual concern, payment data could wend its way without needed security and structure.
Certainly the mobile payment market is fascinating to watch. Who would have imagined 20 years ago that your wallet could very well be replaced by a mobile phone?
But will this technology disrupt or energize banks? While mobile payments pose some challenges, I believe banks will rise to the occasion, and many already have. Billions of dollars have been spent securing the existing payment ecosystem and new entrants have to play by the same rules. This is one area where banks clearly have a leg up, and are well-prepared for the challenges ahead. Banks, mobile payment providers and consumers should keep this in mind.
What do you think?
Showing posts with label mobile payments. Show all posts
Showing posts with label mobile payments. Show all posts
Tuesday, June 14, 2011
Wednesday, May 25, 2011
Cost versus value – who wins?
By Laura Knox, inside sales team leader, DataSource Mobility
In today’s ever challenging economy it’s no surprise that we see technology customers focusing more and more on cost ... and while I am all about getting a bargain and finding the right solution at the right price for my clients, I often find myself explaining that cost does not always equal value.
Much more goes into the concept of value than the upfront purchase price of any solution. You have to think about potential downtime if the equipment breaks, repair costs, replacement if your workers refuse to use the machine because of poor performance, replacement cost if a device fails, upgraded warranty fees (most low cost solutions come with little or no warranty coverage) and the time any IT staff must spend to keep the devices working properly. So, if we are looking at overall value rather than upfront value the emphasis moves from simply finding something cheap to finding something that is high quality.
Now, most people with a healthy knowledge of IT matters already understand that inferior parts and inferior quality plus lack of service are what equal the attractively low price point of generic industry devices – and they are very anxious not to get stuck trying to support devices that will need constant attention and repair - but try explaining this to a person without IT experience who is tasked with finding a top quality solution at a “bargain bin” price and things get tricky.
So, for those of us who are not IT aficionados but need to make smart decisions for the companies we own or are employed by, the question becomes; how do I tell a high quality device from all the other options? Below is a list of questions that I strongly encourage these folks to ask before purchasing any equipment from a potential vendor.
$ vs. ROI vs. TCO
1) What is it made out of?
2) What type of service and support is included in the cost being quoted (and what will you have to pay extra for)?
3) What is the typical lifespan of the device?
4) Are parts and labor outsourced or does the manufacturer actually make the product?
5) Has it passed any level of rugged certification?
6) What is the typical failure rate for the device?
What do you think?
In today’s ever challenging economy it’s no surprise that we see technology customers focusing more and more on cost ... and while I am all about getting a bargain and finding the right solution at the right price for my clients, I often find myself explaining that cost does not always equal value.
Much more goes into the concept of value than the upfront purchase price of any solution. You have to think about potential downtime if the equipment breaks, repair costs, replacement if your workers refuse to use the machine because of poor performance, replacement cost if a device fails, upgraded warranty fees (most low cost solutions come with little or no warranty coverage) and the time any IT staff must spend to keep the devices working properly. So, if we are looking at overall value rather than upfront value the emphasis moves from simply finding something cheap to finding something that is high quality.
Now, most people with a healthy knowledge of IT matters already understand that inferior parts and inferior quality plus lack of service are what equal the attractively low price point of generic industry devices – and they are very anxious not to get stuck trying to support devices that will need constant attention and repair - but try explaining this to a person without IT experience who is tasked with finding a top quality solution at a “bargain bin” price and things get tricky.
So, for those of us who are not IT aficionados but need to make smart decisions for the companies we own or are employed by, the question becomes; how do I tell a high quality device from all the other options? Below is a list of questions that I strongly encourage these folks to ask before purchasing any equipment from a potential vendor.
$ vs. ROI vs. TCO
1) What is it made out of?
2) What type of service and support is included in the cost being quoted (and what will you have to pay extra for)?
3) What is the typical lifespan of the device?
4) Are parts and labor outsourced or does the manufacturer actually make the product?
5) Has it passed any level of rugged certification?
6) What is the typical failure rate for the device?
What do you think?
Friday, May 13, 2011
Bringing mobile banking to the masses
Posted by Mark Brousseau
The number of unbanked or underbanked mobile subscribers around the world is projected to reach ~2 billion by 2012, according to research from Oliver Wyman and PlaNet Finance Group. Today, only around 50 million subscribers use mobile money services. Most of these deployments have been focusing on first generation mobile money products such as remittances, airtime top-up, bill payments and loan repayment.
The transformational impact of mobile money is expected to come from second generation financial services such as micro-savings, micro-credit and micro-insurance, especially in countries with less than 10 percent retail banking penetration, according to Oliver Wyman. Both telcos and financial institutions should benefit from the take-up of these products, as they reap expertise from complementary skills and deliver more value to customers, the research firm says.
However, the formula for success is not straightforward.
Two distinct models are emerging:
... The distribution of microfinance through mobile money via existing microfinance banks
... The distribution of microfinance through a virtual microfinance bank, operating as a pure mobile player.
“The benefits of these models include a more than twofold increase in access to banking, 20-50 percent lower operational costs for the microfinance institution and revenue or market share benefits for the Mobile Network Operator,” says Arnaud Ventura, co-founder and vice president of PlaNet Finance Group.
In a report, PlaNet Finance Group and Oliver Wyman conclude:
... Mobile Microfinance can have a significant impact on increasing financial services access for unbanked subscribers by eliminating all the disadvantages of physical bank branches. The benefits of this service are both social and economic.
... It is a cost-effective way for banks and MFIs to reach the masses by capitalizing on the widespread penetration of telecom distribution networks. PlaNet Finance and Oliver Wyman also see a new breed of intermediaries emerging that allow partners on both sides to interact smoothly by playing the “interconnection” role, making money on transactions rather than the spread.
Greg Rung, partner at Oliver Wyman said “PlaNet Finance and Oliver Wyman are convinced that, agreeing on a long-term vision, all stakeholders, from banks to distributors to regulators, need to come together to design an adequate offer and build a win-win model that can address all challenges successfully.”
What do you think?
The number of unbanked or underbanked mobile subscribers around the world is projected to reach ~2 billion by 2012, according to research from Oliver Wyman and PlaNet Finance Group. Today, only around 50 million subscribers use mobile money services. Most of these deployments have been focusing on first generation mobile money products such as remittances, airtime top-up, bill payments and loan repayment.
The transformational impact of mobile money is expected to come from second generation financial services such as micro-savings, micro-credit and micro-insurance, especially in countries with less than 10 percent retail banking penetration, according to Oliver Wyman. Both telcos and financial institutions should benefit from the take-up of these products, as they reap expertise from complementary skills and deliver more value to customers, the research firm says.
However, the formula for success is not straightforward.
Two distinct models are emerging:
... The distribution of microfinance through mobile money via existing microfinance banks
... The distribution of microfinance through a virtual microfinance bank, operating as a pure mobile player.
“The benefits of these models include a more than twofold increase in access to banking, 20-50 percent lower operational costs for the microfinance institution and revenue or market share benefits for the Mobile Network Operator,” says Arnaud Ventura, co-founder and vice president of PlaNet Finance Group.
In a report, PlaNet Finance Group and Oliver Wyman conclude:
... Mobile Microfinance can have a significant impact on increasing financial services access for unbanked subscribers by eliminating all the disadvantages of physical bank branches. The benefits of this service are both social and economic.
... It is a cost-effective way for banks and MFIs to reach the masses by capitalizing on the widespread penetration of telecom distribution networks. PlaNet Finance and Oliver Wyman also see a new breed of intermediaries emerging that allow partners on both sides to interact smoothly by playing the “interconnection” role, making money on transactions rather than the spread.
Greg Rung, partner at Oliver Wyman said “PlaNet Finance and Oliver Wyman are convinced that, agreeing on a long-term vision, all stakeholders, from banks to distributors to regulators, need to come together to design an adequate offer and build a win-win model that can address all challenges successfully.”
What do you think?
Wednesday, February 2, 2011
2011 Predictions for Payments Security
Posted by Mark Brousseau
As 2010 came to an end, it was no surprise that payments security was a top priority for financial institutions, credit card companies, merchants and consumers.
Progress in stopping attacks was achieved last year, resulting in many high-profile arrests. More than 50 individuals involved in the highly publicized Zeus gang were apprehended, and developers of the Mariposa botnet, which stole information from approximately 12.7 million users around the world, were arrested. Most recently, five arrests were made this year for taking part in a series of denial-of-service attacks against major websites as part of the group "Anonymous."
Despite these efforts, cyber fraud is far from being eliminated. In fact, it is evolving into groups (WikiLeaks), resulting in even more malicious and dangerous attacks on consumers and organizations in 2011.
Daniel McCann, president of NetSecure Technologies, a provider of online transaction security solutions, sees the following payments security trends and issues in 2011:
... The emergence of hacker groups
... An increase in mobile fraud as mobile commerce increases
... More attacks on Apple’s i-products as they continue to dominate the industry
... A significant increase in security spending, especially in new technologies like virtualization
What do you think?
As 2010 came to an end, it was no surprise that payments security was a top priority for financial institutions, credit card companies, merchants and consumers.
Progress in stopping attacks was achieved last year, resulting in many high-profile arrests. More than 50 individuals involved in the highly publicized Zeus gang were apprehended, and developers of the Mariposa botnet, which stole information from approximately 12.7 million users around the world, were arrested. Most recently, five arrests were made this year for taking part in a series of denial-of-service attacks against major websites as part of the group "Anonymous."
Despite these efforts, cyber fraud is far from being eliminated. In fact, it is evolving into groups (WikiLeaks), resulting in even more malicious and dangerous attacks on consumers and organizations in 2011.
Daniel McCann, president of NetSecure Technologies, a provider of online transaction security solutions, sees the following payments security trends and issues in 2011:
... The emergence of hacker groups
... An increase in mobile fraud as mobile commerce increases
... More attacks on Apple’s i-products as they continue to dominate the industry
... A significant increase in security spending, especially in new technologies like virtualization
What do you think?
Monday, December 6, 2010
Cloud computing grows up
By R. Edwin Pearce
The next year will be big for cloud computing, with the technology transitioning from “early adopter status” into a mainstream platform for IT. That’s according to IDC, a leading research and advisory firm, which ranked the maturation of cloud computing among its top IT predictions for 2011.
IDC predicts that spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30 percent from 2010, as organizations move a wider range of business applications into the cloud. Small and medium-sized business cloud use will surge in 2011, with adoption of some cloud resources topping 33 percent among U.S. midsize firms by year’s end.
“[Cloud computing] can no longer be invested in, or managed, as sandbox efforts around the edges of the market. Instead, they are rapidly becoming the market itself and must be addressed accordingly,” warns Frank Gens, senior vice president and chief analyst at Framingham, MA-based IDC.
Gens is exactly right. Organizations of all sizes are taking a hard look at cloud-based solutions as a way to avoid the hefty capital investments and ongoing maintenance and upgrade costs associated with traditional on-premise solutions, and to ensure their IT infrastructure remains up-to-date.
In addition to changing the way organizations access business applications, the growth of cloud computing also will bring mobile banking and payments one step closer to reality, IDC predicts. But this also is true of mobile applications in other industries, most notably healthcare and insurance.
What do you think?
R. Edwin Pearce is executive vice president of sales and corporate development at eGistics, Inc. (www.egisticsinc.com), a leading provider of hosted solutions for payments and document automation. He can be reached at 214-256-4607 or via e-mail at epearce@egisticsinc.com.
The next year will be big for cloud computing, with the technology transitioning from “early adopter status” into a mainstream platform for IT. That’s according to IDC, a leading research and advisory firm, which ranked the maturation of cloud computing among its top IT predictions for 2011.
IDC predicts that spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30 percent from 2010, as organizations move a wider range of business applications into the cloud. Small and medium-sized business cloud use will surge in 2011, with adoption of some cloud resources topping 33 percent among U.S. midsize firms by year’s end.
“[Cloud computing] can no longer be invested in, or managed, as sandbox efforts around the edges of the market. Instead, they are rapidly becoming the market itself and must be addressed accordingly,” warns Frank Gens, senior vice president and chief analyst at Framingham, MA-based IDC.
Gens is exactly right. Organizations of all sizes are taking a hard look at cloud-based solutions as a way to avoid the hefty capital investments and ongoing maintenance and upgrade costs associated with traditional on-premise solutions, and to ensure their IT infrastructure remains up-to-date.
In addition to changing the way organizations access business applications, the growth of cloud computing also will bring mobile banking and payments one step closer to reality, IDC predicts. But this also is true of mobile applications in other industries, most notably healthcare and insurance.
What do you think?
R. Edwin Pearce is executive vice president of sales and corporate development at eGistics, Inc. (www.egisticsinc.com), a leading provider of hosted solutions for payments and document automation. He can be reached at 214-256-4607 or via e-mail at epearce@egisticsinc.com.
Thursday, September 23, 2010
Bookies Pick iPad Killer
With rumors swirling that BlackBerry maker Research in Motion (RIM) could unveil its forthcoming tablet -- a.k.a. “the BlackPad” -- as early as next week, consumers and analysts are guessing what company will be next to officially announce a tablet to compete with Apple’s iPad.
Mickey Richardson and his team at Bookmaker.com, one of the leading sportsbooks, have calculated the odds on who the next company to release a tablet to compete with Apple’s iPad in 2010 will be.
LG +300 25%
HTC +100 50%
SHARP +300 25%
MOTOROLA +300 25%
NOKIA +150 40%
SANYO +300 25%
For those of you unfamiliar with the joys of wagering, the +/- indicates the return on the wager. The percentage is the likelihood that response will occur. For example: Betting on the candidate least likely to win would earn the most amount of money, should that happen.
Where would you place your bet?
Mickey Richardson and his team at Bookmaker.com, one of the leading sportsbooks, have calculated the odds on who the next company to release a tablet to compete with Apple’s iPad in 2010 will be.
LG +300 25%
HTC +100 50%
SHARP +300 25%
MOTOROLA +300 25%
NOKIA +150 40%
SANYO +300 25%
For those of you unfamiliar with the joys of wagering, the +/- indicates the return on the wager. The percentage is the likelihood that response will occur. For example: Betting on the candidate least likely to win would earn the most amount of money, should that happen.
Where would you place your bet?
Monday, June 7, 2010
How tax agencies are coping with the economy
Posted by Mark Brousseau
“We are all in the same boat,” Roger Ervin, secretary, Wisconsin Department of Revenue, told attendees at the Federation of Tax Administrators (FTA) Annual Meeting at the Grand Hyatt Atlanta this morning. “As the economy continues to falter, we need to be more diligent in collections. But citizens want more. They want us to be as efficient as possible. And they want us to do it quietly.”
Ken Lay, secretary, North Carolina Department of Revenue, agreed, noting that, “We want to be easier to do business with. We want to be professional. And we want to be firm, but fair.”
Lisa Echeverri, executive director, Florida Department of Revenue, noted that the recession has presented her department with an opportunity to take a fresh look at its operations and processes.
“You should never waste a good crisis,” Lay concurred, adding that his department is becoming much more process and metric focused. “We are redoing all of our processes. So everyone is not only busy, they are also working on creating the new North Carolina Department of Revenue.”
“We’re beginning to change the organization to fit the processes that will fit the technology,” Lay said, noting that his department has already enhanced its data warehouse capabilities. Some of the changes Lay’s department has implemented include monthly transformation meetings for staff, an updated intranet site with information on changes, deployment of a Microsoft Sharepoint site where anyone can see the state of the project, and an emphasis on deadlines and holding firm on them.
“We’re not doing this for the sake of the Department of Revenue. We’re really doing it for the citizens of North Carolina,” Lay explained. Changes like these may become necessary.
“We are in a period of market conversion in how taxpayers interact with their tax departments,” Ervin added. “Many are choosing electronic products, as their contribution to the future, while many others are continuing with paper. Many taxpayers are using the Internet with regularity, while others still call their tax department until they speak with a person. Clearly, we are in a deep and complex recession and recovery is still months or years away. In this environment, many citizens cannot or will not pay. This puts pressure on collections. Intuitively, this should be a time of investments in new technology and processes. But tight budgets have put a hold on those investments.”
“We are all in the same boat,” Roger Ervin, secretary, Wisconsin Department of Revenue, told attendees at the Federation of Tax Administrators (FTA) Annual Meeting at the Grand Hyatt Atlanta this morning. “As the economy continues to falter, we need to be more diligent in collections. But citizens want more. They want us to be as efficient as possible. And they want us to do it quietly.”
Ken Lay, secretary, North Carolina Department of Revenue, agreed, noting that, “We want to be easier to do business with. We want to be professional. And we want to be firm, but fair.”
Lisa Echeverri, executive director, Florida Department of Revenue, noted that the recession has presented her department with an opportunity to take a fresh look at its operations and processes.
“You should never waste a good crisis,” Lay concurred, adding that his department is becoming much more process and metric focused. “We are redoing all of our processes. So everyone is not only busy, they are also working on creating the new North Carolina Department of Revenue.”
“We’re beginning to change the organization to fit the processes that will fit the technology,” Lay said, noting that his department has already enhanced its data warehouse capabilities. Some of the changes Lay’s department has implemented include monthly transformation meetings for staff, an updated intranet site with information on changes, deployment of a Microsoft Sharepoint site where anyone can see the state of the project, and an emphasis on deadlines and holding firm on them.
“We’re not doing this for the sake of the Department of Revenue. We’re really doing it for the citizens of North Carolina,” Lay explained. Changes like these may become necessary.
“We are in a period of market conversion in how taxpayers interact with their tax departments,” Ervin added. “Many are choosing electronic products, as their contribution to the future, while many others are continuing with paper. Many taxpayers are using the Internet with regularity, while others still call their tax department until they speak with a person. Clearly, we are in a deep and complex recession and recovery is still months or years away. In this environment, many citizens cannot or will not pay. This puts pressure on collections. Intuitively, this should be a time of investments in new technology and processes. But tight budgets have put a hold on those investments.”
Monday, April 26, 2010
TAWPI @ NACHA Payments
Posted by Mark Brousseau
During a luncheon presentation for journalists at its Payments conference in Seattle, NACHA shared some key takeaways from its PayItGreen Survey 2010:
Less paper equals less unhappiness!
• Respondents expressing lower levels of satisfaction with primary bank or credit union also report lower “electronic only” rates for key financial institution accounts
• This overall finding extends to billers as well
• Proportion of dissatisfied/neutral customers doubles as ‘electronic’ behavior decreases
In billing, minimalism is everything
• Focus on eliminating clutter, reducing paper waste and easy access to statements
For bill payment, expediency is the bottom-line
• Reduction of time and effort emerges as the primary driver
Don’t rule out the opt-out, because most consumers are OK with it
• 6 out of 10 respondents are open/neutral to billers/banks shutting off paper statements automatically
“Double-dipping” – when consumers receive a bill via paper and electronically – occurs more than twice as often with financial services accounts compared to other billers
Among various types of financial accounts, checking and card accounts leads in paperless while others lag farther behind
• Accounts such as investments, lending and insurance have lower rates of paperless
In general, financial services companies lag their non-financial services billers in getting customers to go paperless
• Some sectors such as utilities need particular attention (perhaps bankers can help their corporate clients!)
Providers can improve paperless behavior with particular site or product changes
• Make higher mention of trying to sign up online but finding the process to be too complicated
• Are twice as likely to not trust their provider’s web site
• Worry over not having access to archived statements as well as a need to be in control over finances
What do you think?
During a luncheon presentation for journalists at its Payments conference in Seattle, NACHA shared some key takeaways from its PayItGreen Survey 2010:
Less paper equals less unhappiness!
• Respondents expressing lower levels of satisfaction with primary bank or credit union also report lower “electronic only” rates for key financial institution accounts
• This overall finding extends to billers as well
• Proportion of dissatisfied/neutral customers doubles as ‘electronic’ behavior decreases
In billing, minimalism is everything
• Focus on eliminating clutter, reducing paper waste and easy access to statements
For bill payment, expediency is the bottom-line
• Reduction of time and effort emerges as the primary driver
Don’t rule out the opt-out, because most consumers are OK with it
• 6 out of 10 respondents are open/neutral to billers/banks shutting off paper statements automatically
“Double-dipping” – when consumers receive a bill via paper and electronically – occurs more than twice as often with financial services accounts compared to other billers
Among various types of financial accounts, checking and card accounts leads in paperless while others lag farther behind
• Accounts such as investments, lending and insurance have lower rates of paperless
In general, financial services companies lag their non-financial services billers in getting customers to go paperless
• Some sectors such as utilities need particular attention (perhaps bankers can help their corporate clients!)
Providers can improve paperless behavior with particular site or product changes
• Make higher mention of trying to sign up online but finding the process to be too complicated
• Are twice as likely to not trust their provider’s web site
• Worry over not having access to archived statements as well as a need to be in control over finances
What do you think?
TAWPI @ NACHA Payments
Posted by Mark Brousseau
Consumers’ use of their Internet-capable mobile phones to access online banking and pay bills online climbed significantly over the past 12 months, according to new research released and jointly sponsored by FIS, NACHA, and eCom Advisors. This research was unveiled at a breakfast press conference this morning at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“With expanding ownership of Internet-capable smartphones, consumers’ use of their mobile devices to access online banking information, view and pay bills, and make online purchases is becoming much more mainstream. We worked with NACHA and eCom Advisors on this research to better understand the pace of mobile banking adoption and the primary factors that are driving this consumer behavior,” stated Kay Nichols, executive vice president of channel solutions at FIS. FIS is a pioneer in delivering integrated mobile banking and payment solutions that provide end-customers with the convenience and immediacy in accessing their banking information.
The March 2010 survey, completed by 1,236 U.S. consumers who own and use mobile phones, was designed as a repeat of a similar consumer survey fielded by eCom Advisors in March 2009. The 2010 research found that 27 percent of consumers who own an Internet-capable mobile phone had used the device to access their financial institution’s online banking website within the past 30 days, compared to the 2009 result of 22 percent. In addition, 20 percent of consumers who own an Internet-capable mobile phone had used the device within the past 30 days to pay bills through a financial institution or a biller website, a significant increase from last year’s response of 11 percent.
In addition to adoption and use, the 2010 research foundthat consumers’ propensity to use mobile devices to conduct banking functions correlates more to the sophistication of the mobile device rather than the consumer’s age. The percentage of consumers who reported using their Internet-capable mobile phone to conduct online banking transactions within the past 30 days varied significantly by type of device owned:
… 65 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 30 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 27 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 9 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
“Some smartphones are clearly smarter than others when it comes to inducing mobile banking and bill pay usage,” stated Fred Brothers, managing partner of eCom Advisors. “Regardless of the consumer’s age, those equipped with iPhones or the newest smartphones with full-sized touch screens are twice as likely to use them for mobile financial services as those who have smartphone devices with smaller screens or keyboards,” said Brothers.
The influence of mobile device sophistication was also apparent in consumers’ bill payment behaviors. The percentage of consumers who reported using their Internet-capable mobile phone to pay bills online through a financial institution or a biller websitewithin the past 30 days varied significantly by type of device owned:
… 40 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 16 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 22 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 13 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
Consistent with a key finding from the 2009 research, the 2010 study revealed that while overall mobile bill-pay adoption is increasing, there is room for financial institutions to drive market growth. Of the 20 percent of consumers who reported using their mobile devices to pay bills online within the past 30 days, 62 percent stated they went directly to billers’ websites most often, while 38 percent reported that they went to their financial institution’s website most often.
“The results reiterate that the time is right for financial institutions to expand their online bill presentment, as well as bill payment, solutions,” stated Janet O. Estep, president and CEO, NACHA. “Introducing PC- and mobile-based products that make it easy for consumers to navigate the complete billing cycle is critical to ongoing adoption. Initiatives such as EBIDS, supported via by ACH Network, offer a way to efficiently deliver electronic bills of all kinds to a wide breadth of consumers via online banking.”
What do you think?
Consumers’ use of their Internet-capable mobile phones to access online banking and pay bills online climbed significantly over the past 12 months, according to new research released and jointly sponsored by FIS, NACHA, and eCom Advisors. This research was unveiled at a breakfast press conference this morning at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“With expanding ownership of Internet-capable smartphones, consumers’ use of their mobile devices to access online banking information, view and pay bills, and make online purchases is becoming much more mainstream. We worked with NACHA and eCom Advisors on this research to better understand the pace of mobile banking adoption and the primary factors that are driving this consumer behavior,” stated Kay Nichols, executive vice president of channel solutions at FIS. FIS is a pioneer in delivering integrated mobile banking and payment solutions that provide end-customers with the convenience and immediacy in accessing their banking information.
The March 2010 survey, completed by 1,236 U.S. consumers who own and use mobile phones, was designed as a repeat of a similar consumer survey fielded by eCom Advisors in March 2009. The 2010 research found that 27 percent of consumers who own an Internet-capable mobile phone had used the device to access their financial institution’s online banking website within the past 30 days, compared to the 2009 result of 22 percent. In addition, 20 percent of consumers who own an Internet-capable mobile phone had used the device within the past 30 days to pay bills through a financial institution or a biller website, a significant increase from last year’s response of 11 percent.
In addition to adoption and use, the 2010 research foundthat consumers’ propensity to use mobile devices to conduct banking functions correlates more to the sophistication of the mobile device rather than the consumer’s age. The percentage of consumers who reported using their Internet-capable mobile phone to conduct online banking transactions within the past 30 days varied significantly by type of device owned:
… 65 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 30 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 27 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 9 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
“Some smartphones are clearly smarter than others when it comes to inducing mobile banking and bill pay usage,” stated Fred Brothers, managing partner of eCom Advisors. “Regardless of the consumer’s age, those equipped with iPhones or the newest smartphones with full-sized touch screens are twice as likely to use them for mobile financial services as those who have smartphone devices with smaller screens or keyboards,” said Brothers.
The influence of mobile device sophistication was also apparent in consumers’ bill payment behaviors. The percentage of consumers who reported using their Internet-capable mobile phone to pay bills online through a financial institution or a biller websitewithin the past 30 days varied significantly by type of device owned:
… 40 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 16 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 22 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 13 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
Consistent with a key finding from the 2009 research, the 2010 study revealed that while overall mobile bill-pay adoption is increasing, there is room for financial institutions to drive market growth. Of the 20 percent of consumers who reported using their mobile devices to pay bills online within the past 30 days, 62 percent stated they went directly to billers’ websites most often, while 38 percent reported that they went to their financial institution’s website most often.
“The results reiterate that the time is right for financial institutions to expand their online bill presentment, as well as bill payment, solutions,” stated Janet O. Estep, president and CEO, NACHA. “Introducing PC- and mobile-based products that make it easy for consumers to navigate the complete billing cycle is critical to ongoing adoption. Initiatives such as EBIDS, supported via by ACH Network, offer a way to efficiently deliver electronic bills of all kinds to a wide breadth of consumers via online banking.”
What do you think?
TAWPI @ NACHA Payments
Posted by Mark Brousseau
In 2010, Online Banking Solutions (OBS) predicts the following banking industry trends:
… Online banking and security will take center stage.
… Banks will begin to leverage additional delivery channels beyond the Web to create high-value solutions for their clients. This will begin with alerts and notifications, secure file transfers and the introduction of commercial mobile banking services.
… Companies will increase the number of file exchanges with banks in support of a full range of treasury services.
… Banks will begin to develop/acquire commercial entitlements and single sign-on (SSO) components to rationalize and improve the overall end-user experience.
What do you think?
In 2010, Online Banking Solutions (OBS) predicts the following banking industry trends:
… Online banking and security will take center stage.
… Banks will begin to leverage additional delivery channels beyond the Web to create high-value solutions for their clients. This will begin with alerts and notifications, secure file transfers and the introduction of commercial mobile banking services.
… Companies will increase the number of file exchanges with banks in support of a full range of treasury services.
… Banks will begin to develop/acquire commercial entitlements and single sign-on (SSO) components to rationalize and improve the overall end-user experience.
What do you think?
Saturday, January 30, 2010
The Cell Phone Security Threat
Posted by Mark Brousseau
The majority of large and medium businesses are failing to adequately protect themselves against the growing threat of mobile voice call interception; leaving them vulnerable to loss of sensitive and confidential corporate information. That's according to a new survey by ABI Research on behalf of Cellcrypt.
Businesses clearly recognize the threat of cell phone interception: three-quarters of the surveyed corporations have a security policy covering cell phone calling and four out of five IT professionals surveyed believe that cell phones are equally or more vulnerable to interception than email.
Yet, the research shows that while mobile phones and email are both used routinely to communicate confidential information – with 79 percent of organizations that discuss sensitive or confidential information over mobile doing so at least weekly and 51 percent daily – only 18 percent have explicit mobile voice call security solutions in place.
Research has shown that data loss can have a major impact on market capitalization, reducing it by as much as 5-10 percent, as well as resulting in lawsuits for senior executives, severely damaging their reputation.
The growing problem was highlighted in August, when German hackers announced a project to create a code table that cracks the encryption of GSM mobile calls, used in 80 percent of the world’s cell phone calls. This codebook is planned to be freely available within the next 6 months, and significantly lowers the bar for everyday hackers to crack GSM calls using only a high-end laptop.
One alarming fact emerging from the survey was that 55 percent of respondents in IT roles thought that their organisation had implemented mobile voice call encryption solutions but on further investigation only 18% had actually done so.
“Effective email security has become routine but our research shows most businesses do not apply anything like the same level of robust security to cell phone calls. Companies that do not respond are exposing themselves to attack,” said Stan Schatt Vice President and Practice Director, Healthcare and Security, ABI Research.
“Equally concerning is that a significant number of people who identified themselves as being responsible for cell phone voice call security incorrectly believe the organisations’ mobile calls have been protected when they have not. This perception that they are protected when in reality they are not suggests a serious hole in the information security of many businesses. It is important that companies take urgent steps to review their measures for countering this growing corporate risk area,” Schatt continued.
“In light of this summer’s news that a GSM cracking codebook will be made widely and freely available very soon – possibly before the New Year – and sub-$1000 interception equipment being available soon after, this lack of security is particularly worrying,” says Simon Bransfield-Garth, CEO of Cellcrypt.
“Businesses must plan now for the eventuality that their mobile voice calls will come under increasing attack within the next 6 months. A ‘policy of hope’ towards mobile phone security is not adequate, voice is another data service and should be afforded the same security considerations as email and other corporate communications,” continued Bransfield-Garth.
Security of mobile voice calls is not limited to interception of radio waves between a cell phone and a base station mast: interception risks occur at various segments along a call path which may involve multiple network operators in a variety of countries each having a different levels of security measures and risks.
Among the key findings of the survey:
... 75 percent of the businesses surveyed discuss sensitive or confidential information via cell phones and 81 percent do so via email
... Of that 75 percent, 79 percent of businesses do so at least weekly, 51 percent do so daily
... Of the businesses sampled, 82 percent have a high level of concern about the security of email and 69 percent about cell phone security
... 41 percent of the individuals surveyed think mobile phones are more vulnerable to interception than email and 39% think they are equally as vulnerable to interception as email
... 74 percent of businesses discuss financially sensitive information on cell phones and of those 77 percent believe that if this were intercepted it would have a major impact
... 55 percent of respondents thought that their organisation had implemented mobile voice call encryption solutions but on further investigation only 18 percent had actually done so
What do you think?
The majority of large and medium businesses are failing to adequately protect themselves against the growing threat of mobile voice call interception; leaving them vulnerable to loss of sensitive and confidential corporate information. That's according to a new survey by ABI Research on behalf of Cellcrypt.
Businesses clearly recognize the threat of cell phone interception: three-quarters of the surveyed corporations have a security policy covering cell phone calling and four out of five IT professionals surveyed believe that cell phones are equally or more vulnerable to interception than email.
Yet, the research shows that while mobile phones and email are both used routinely to communicate confidential information – with 79 percent of organizations that discuss sensitive or confidential information over mobile doing so at least weekly and 51 percent daily – only 18 percent have explicit mobile voice call security solutions in place.
Research has shown that data loss can have a major impact on market capitalization, reducing it by as much as 5-10 percent, as well as resulting in lawsuits for senior executives, severely damaging their reputation.
The growing problem was highlighted in August, when German hackers announced a project to create a code table that cracks the encryption of GSM mobile calls, used in 80 percent of the world’s cell phone calls. This codebook is planned to be freely available within the next 6 months, and significantly lowers the bar for everyday hackers to crack GSM calls using only a high-end laptop.
One alarming fact emerging from the survey was that 55 percent of respondents in IT roles thought that their organisation had implemented mobile voice call encryption solutions but on further investigation only 18% had actually done so.
“Effective email security has become routine but our research shows most businesses do not apply anything like the same level of robust security to cell phone calls. Companies that do not respond are exposing themselves to attack,” said Stan Schatt Vice President and Practice Director, Healthcare and Security, ABI Research.
“Equally concerning is that a significant number of people who identified themselves as being responsible for cell phone voice call security incorrectly believe the organisations’ mobile calls have been protected when they have not. This perception that they are protected when in reality they are not suggests a serious hole in the information security of many businesses. It is important that companies take urgent steps to review their measures for countering this growing corporate risk area,” Schatt continued.
“In light of this summer’s news that a GSM cracking codebook will be made widely and freely available very soon – possibly before the New Year – and sub-$1000 interception equipment being available soon after, this lack of security is particularly worrying,” says Simon Bransfield-Garth, CEO of Cellcrypt.
“Businesses must plan now for the eventuality that their mobile voice calls will come under increasing attack within the next 6 months. A ‘policy of hope’ towards mobile phone security is not adequate, voice is another data service and should be afforded the same security considerations as email and other corporate communications,” continued Bransfield-Garth.
Security of mobile voice calls is not limited to interception of radio waves between a cell phone and a base station mast: interception risks occur at various segments along a call path which may involve multiple network operators in a variety of countries each having a different levels of security measures and risks.
Among the key findings of the survey:
... 75 percent of the businesses surveyed discuss sensitive or confidential information via cell phones and 81 percent do so via email
... Of that 75 percent, 79 percent of businesses do so at least weekly, 51 percent do so daily
... Of the businesses sampled, 82 percent have a high level of concern about the security of email and 69 percent about cell phone security
... 41 percent of the individuals surveyed think mobile phones are more vulnerable to interception than email and 39% think they are equally as vulnerable to interception as email
... 74 percent of businesses discuss financially sensitive information on cell phones and of those 77 percent believe that if this were intercepted it would have a major impact
... 55 percent of respondents thought that their organisation had implemented mobile voice call encryption solutions but on further investigation only 18 percent had actually done so
What do you think?
Monday, January 11, 2010
Mobility Brings ... Hope?
Posted by Mark Brousseau
Nokia CEO Olli-Pekka Kallasvuo told attendees at the International Consumer Electronics Show that the world's developing economies are places of increasing opportunity and upward mobility, where wealth is being created at an incredible rate and business opportunities abound - in part due to the spread of mobile communications.
"Mobile communications have played a big role in bringing hope and higher living standards to literally billions of people," Kallasvuo said during a keynote speech. "The trend promises to accelerate in the coming decade, as the power and capabilities of smartphones spread across the globe."
Kallasvuo discussed how innovators, particularly software developers, can join Nokia in its efforts to be a force for good by helping to accelerate development in these growth markets. He announced the $1 million Nokia Growth Economy Venture Challenge - a $1 million investment from Nokia to encourage innovators and developers to come up with innovate ways to help people and promote upward mobility around the world.
"We've seen what the tech community can do when it focuses on problems that are also opportunities," Kallasvuo said. "We want to channel that energy toward improving lives in the developing world."
Kallasvuo noted that there are about 4.6 billion mobile subscriptions among the planet's 6.8 billion people today. "For the majority of the world's people, their first and only access to the Internet will be through a mobile device - not a PC. And this access is spreading very, very fast."
"In China, every month more than 7 million people gain access to the Internet for the first time, and mostly on mobile devices," he said. "This trend shows no signs of slowing. The mobile device has become a necessity for upward mobility."
Kallasvuo spoke of the importance of understanding every market in which a company does business.
"Business people often tend to lump all of the growing countries outside the West into one category. They call them 'developing countries,' 'emerging countries' or 'emerging markets.' Each of these markets is uniquely different and complex. A one-size-fits-all approach just doesn't work."
Kallasvuo shared the CES stage with Jan Chipchase, whom he described as the "Indiana Jones of Nokia." Chipchase travels the far corners of the world to help Nokia understand how people live and how mobile phones might help them to live better.
"People around the world have shown us that adversity leads to real innovation," said Chipchase. "People in some of the world's most remote and poorest countries have inspired us and amazed us. They know what they need and they find ways to make it happen."
Nokia CEO Olli-Pekka Kallasvuo told attendees at the International Consumer Electronics Show that the world's developing economies are places of increasing opportunity and upward mobility, where wealth is being created at an incredible rate and business opportunities abound - in part due to the spread of mobile communications.
"Mobile communications have played a big role in bringing hope and higher living standards to literally billions of people," Kallasvuo said during a keynote speech. "The trend promises to accelerate in the coming decade, as the power and capabilities of smartphones spread across the globe."
Kallasvuo discussed how innovators, particularly software developers, can join Nokia in its efforts to be a force for good by helping to accelerate development in these growth markets. He announced the $1 million Nokia Growth Economy Venture Challenge - a $1 million investment from Nokia to encourage innovators and developers to come up with innovate ways to help people and promote upward mobility around the world.
"We've seen what the tech community can do when it focuses on problems that are also opportunities," Kallasvuo said. "We want to channel that energy toward improving lives in the developing world."
Kallasvuo noted that there are about 4.6 billion mobile subscriptions among the planet's 6.8 billion people today. "For the majority of the world's people, their first and only access to the Internet will be through a mobile device - not a PC. And this access is spreading very, very fast."
"In China, every month more than 7 million people gain access to the Internet for the first time, and mostly on mobile devices," he said. "This trend shows no signs of slowing. The mobile device has become a necessity for upward mobility."
Kallasvuo spoke of the importance of understanding every market in which a company does business.
"Business people often tend to lump all of the growing countries outside the West into one category. They call them 'developing countries,' 'emerging countries' or 'emerging markets.' Each of these markets is uniquely different and complex. A one-size-fits-all approach just doesn't work."
Kallasvuo shared the CES stage with Jan Chipchase, whom he described as the "Indiana Jones of Nokia." Chipchase travels the far corners of the world to help Nokia understand how people live and how mobile phones might help them to live better.
"People around the world have shown us that adversity leads to real innovation," said Chipchase. "People in some of the world's most remote and poorest countries have inspired us and amazed us. They know what they need and they find ways to make it happen."
Tuesday, December 15, 2009
NACHA Rule Strengthens Need for Payments Hub
Posted by Mark Brousseau
NACHA's proposed rule change for mobile payments provides a wake-up call for banks and billers unconvinced of the need for an Enterprise Payments Hub. Leilani Doyle (ldoyle@usdataworks.com) of US Dataworks (www.usdataworks.com) explains:
A proposed NACHA rule change for mobile payments is another nudge for banks and billers that have been reluctant to deal with the stark realities of the increasingly diverse payments environment.
The proposed rule change would expand the definition of Internet-Initiated Entries (WEB) to include ACH debits authorized and/or initiated via mobile/wireless networks, and require that those payments utilize the WEB Standard Entry Class (SEC) code. The rule change would cover payments made with a mobile device such as a smart phone, cell phone, and/or PDA, where the payment is transmitted via a wireless network. NACHA just concluded a request for comments on the change.
Expanding the WEB SEC code to include mobile payments is a reasonable idea.
NACHA says the rule change would clarify the entry classification for mobile payments over the ACH Network, and provide a framework for risk management and security, including authentication and authorization. While current NACHA rules don't specifically address mobile payments, many companies are either originating these payments over the ACH Network, or planning to in the future.
The NACHA proposal comes at a time when mobile payments are poised to grow. Insight Research Corporation estimates that 2.2 billion consumers will generate $124 billion in mobile financial transactions by 2014. More conservatively, Mercator Advisory Group estimates that payments from remote devices will grow from an estimated $389 million in 2009 to $8.9 billion in 2014.
A Better Solution
Regardless of how fast you believe mobile payments will grow, the NACHA rule change for mobile payments shines a bright light on a subject that is vexing many banks and billers: how to deal with yet another distinct delivery channel for payments with its own unique characteristics. Banks and billers must balance the need to mitigate the risks of each payment channel with the desire to remain flexible and avoid creating new silos, which, in turn, stifle agility and customer responsiveness.
To be sure, as mobile payments volumes rise, the channel will bring its own set of systems and process challenges, and be subject to fraud and attack -- regardless of the NACHA rule change.
That's true of all of the emerging payment channels.
The solution lies in utilizing an Enterprise Payments Hub to provide a single platform for processing all paper-based and electronic payments (including mobile), regardless of clearing channels.
An Enterprise Payments Hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes. Management of all payment channels, including lockbox, mobile/wireless, Web bill payments, and over-the-counter work, is controlled through a single enterprise platform. An Enterprise Payments Hub is capable of managing the entire payments lifecycle including payments processing, check processing, retail processing, payments decisioning, and returns management. Incoming payments are cleared using Check 21 and ARC conversion for conventional remittance or lockbox processing, while other forms of bill payment and retail work is processed using the appropriate NACHA SEC code ( i.e. ARC, POP, RCK, TEL, WEB, PPD, CCD and BOC). Credit card and debit card payments are also processed through the platform for a fully integrated accounts receivable (AR) process.
An Enterprise Payments Hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an Enterprise Payments Hub can enhance workflow and data management, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float.
These capabilities also provide a platform for straight-through-processing (STP).
The Bottom Line
While the United States lags behind many industrialized countries in the adoption of mobile payments, there is no question that banks and billers need to be prepared for the channel's inevitable growth. The sooner organizations can develop a framework for mobile payments usage and risk, the better positioned they will be when the channel explodes. NACHA should be applauded for providing some level of regulatory guidance on payments that originate from mobile devices.
But the proposed NACHA rule change is only one piece of the emerging puzzle.
To optimize their payments processing and risk management, banks and billers must bring all of their payments channels -- including mobile/wireless -- together in an Enterprise Payments Hub.
What do you think? Post your comments below.
NACHA's proposed rule change for mobile payments provides a wake-up call for banks and billers unconvinced of the need for an Enterprise Payments Hub. Leilani Doyle (ldoyle@usdataworks.com) of US Dataworks (www.usdataworks.com) explains:
A proposed NACHA rule change for mobile payments is another nudge for banks and billers that have been reluctant to deal with the stark realities of the increasingly diverse payments environment.
The proposed rule change would expand the definition of Internet-Initiated Entries (WEB) to include ACH debits authorized and/or initiated via mobile/wireless networks, and require that those payments utilize the WEB Standard Entry Class (SEC) code. The rule change would cover payments made with a mobile device such as a smart phone, cell phone, and/or PDA, where the payment is transmitted via a wireless network. NACHA just concluded a request for comments on the change.
Expanding the WEB SEC code to include mobile payments is a reasonable idea.
NACHA says the rule change would clarify the entry classification for mobile payments over the ACH Network, and provide a framework for risk management and security, including authentication and authorization. While current NACHA rules don't specifically address mobile payments, many companies are either originating these payments over the ACH Network, or planning to in the future.
The NACHA proposal comes at a time when mobile payments are poised to grow. Insight Research Corporation estimates that 2.2 billion consumers will generate $124 billion in mobile financial transactions by 2014. More conservatively, Mercator Advisory Group estimates that payments from remote devices will grow from an estimated $389 million in 2009 to $8.9 billion in 2014.
A Better Solution
Regardless of how fast you believe mobile payments will grow, the NACHA rule change for mobile payments shines a bright light on a subject that is vexing many banks and billers: how to deal with yet another distinct delivery channel for payments with its own unique characteristics. Banks and billers must balance the need to mitigate the risks of each payment channel with the desire to remain flexible and avoid creating new silos, which, in turn, stifle agility and customer responsiveness.
To be sure, as mobile payments volumes rise, the channel will bring its own set of systems and process challenges, and be subject to fraud and attack -- regardless of the NACHA rule change.
That's true of all of the emerging payment channels.
The solution lies in utilizing an Enterprise Payments Hub to provide a single platform for processing all paper-based and electronic payments (including mobile), regardless of clearing channels.
An Enterprise Payments Hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes. Management of all payment channels, including lockbox, mobile/wireless, Web bill payments, and over-the-counter work, is controlled through a single enterprise platform. An Enterprise Payments Hub is capable of managing the entire payments lifecycle including payments processing, check processing, retail processing, payments decisioning, and returns management. Incoming payments are cleared using Check 21 and ARC conversion for conventional remittance or lockbox processing, while other forms of bill payment and retail work is processed using the appropriate NACHA SEC code ( i.e. ARC, POP, RCK, TEL, WEB, PPD, CCD and BOC). Credit card and debit card payments are also processed through the platform for a fully integrated accounts receivable (AR) process.
An Enterprise Payments Hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an Enterprise Payments Hub can enhance workflow and data management, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float.
These capabilities also provide a platform for straight-through-processing (STP).
The Bottom Line
While the United States lags behind many industrialized countries in the adoption of mobile payments, there is no question that banks and billers need to be prepared for the channel's inevitable growth. The sooner organizations can develop a framework for mobile payments usage and risk, the better positioned they will be when the channel explodes. NACHA should be applauded for providing some level of regulatory guidance on payments that originate from mobile devices.
But the proposed NACHA rule change is only one piece of the emerging puzzle.
To optimize their payments processing and risk management, banks and billers must bring all of their payments channels -- including mobile/wireless -- together in an Enterprise Payments Hub.
What do you think? Post your comments below.
Thursday, October 29, 2009
iPhone App for Car Payments
Posted by Mark Brousseau
Mercedes-Benz launched an iPhone application that allows customers to make a car payment, calculate the amount needed to pay off the loan, locate dealers and find customer service numbers. The Mercedes-Benz website describes it as the "coolest way to make a payment."
Some people might hear this news and think "we better do something with mobile", but Forrester Research recommends that companies use the POST (People Objective Strategy Technology) method to determine which technologies they deploy. The POST method starts with the P, understanding the People that the company serves and how they use their mobile devices. People fall into six major categories in terms of mobile phone usage. Nineteen percent (Inactives) do not own a mobile phone, 35 percent (Talkers) only use the voice features of their mobile phone and 13 percent (Communicators) use no data service other than text messaging. The next three categories use more features of their mobile phones; categories do overlap. 19 percent (Connectors) send or receive email on their mobile phones but use the mobile Internet less than weekly. Twenty percent (Entertainers) stream music or video and purchase music over their mobile phones. Twelve percent (SuperConnecteds) use the mobile Internet and log onto social networking sites from their mobile phones at least once a week.
Forrester Research says that after they understand the people they are serving, companies can then set their Objectives and determine what Strategy will accomplish their objectives. The final step is then to choose the technology that will enable the company to meet their strategy. The technology decision comes last in the process, not first, warns Forrester.
What do you think?
Mercedes-Benz launched an iPhone application that allows customers to make a car payment, calculate the amount needed to pay off the loan, locate dealers and find customer service numbers. The Mercedes-Benz website describes it as the "coolest way to make a payment."
Some people might hear this news and think "we better do something with mobile", but Forrester Research recommends that companies use the POST (People Objective Strategy Technology) method to determine which technologies they deploy. The POST method starts with the P, understanding the People that the company serves and how they use their mobile devices. People fall into six major categories in terms of mobile phone usage. Nineteen percent (Inactives) do not own a mobile phone, 35 percent (Talkers) only use the voice features of their mobile phone and 13 percent (Communicators) use no data service other than text messaging. The next three categories use more features of their mobile phones; categories do overlap. 19 percent (Connectors) send or receive email on their mobile phones but use the mobile Internet less than weekly. Twenty percent (Entertainers) stream music or video and purchase music over their mobile phones. Twelve percent (SuperConnecteds) use the mobile Internet and log onto social networking sites from their mobile phones at least once a week.
Forrester Research says that after they understand the people they are serving, companies can then set their Objectives and determine what Strategy will accomplish their objectives. The final step is then to choose the technology that will enable the company to meet their strategy. The technology decision comes last in the process, not first, warns Forrester.
What do you think?
Sunday, September 13, 2009
iPhone Users Doing Mobile Banking
Posted by Mark Brousseau
Mobile banking is quickly moving from a “techie” to mainstream capability that is changing how consumers manage their finances today, which in turn will change how consumers pay for goods in the future. That's according to a new report from Javelin Strategy & Research (www.javelinstrategy.com).
“Mobile banking is quickly moving from infancy to commonplace, which will help separate the winners from losers in banks’ ability to attract and keep technology-loving consumers,” said Mary Monahan, Research Director and Managing Partner. “Consumers are hungry for the ‘always-on’ and ‘real time’ ability to monitor and manage their money, and mobile banking serves that need better than any other.”
Among the findings of the report:
... Nearly half of mobile-phone owners currently have access to mobile banking today.
... By 2014, 45% of mobile-phone users will actually use mobile banking.
99 million U.S. adults will conduct mobile banking transactions at least once per year by 2014 – with 52% of mobile-phone users relying on smartphones.
... Mobile banking will rival online banking, with the former used as a “remote control” and the latter as a detailed form of control panel for more complex transactions.
... AT&T has the highest number of mobile bankers due to the iPhone’s influence, while Verizon Wireless has the lowest penetration for mobile bankers among the top tier U.S. wireless carriers.
“Mobile banking is quickly becoming an essential consumer capability,” said Mark Schwanhausser, Financial Services Channels Analyst. “Just as the iPod changed the music industry and their business models, our data shows that iPhone users are changing the banking industry by leading the way in monitoring and managing finances through mobile devices.”
What do you think? Post your comment below.
Mobile banking is quickly moving from a “techie” to mainstream capability that is changing how consumers manage their finances today, which in turn will change how consumers pay for goods in the future. That's according to a new report from Javelin Strategy & Research (www.javelinstrategy.com).
“Mobile banking is quickly moving from infancy to commonplace, which will help separate the winners from losers in banks’ ability to attract and keep technology-loving consumers,” said Mary Monahan, Research Director and Managing Partner. “Consumers are hungry for the ‘always-on’ and ‘real time’ ability to monitor and manage their money, and mobile banking serves that need better than any other.”
Among the findings of the report:
... Nearly half of mobile-phone owners currently have access to mobile banking today.
... By 2014, 45% of mobile-phone users will actually use mobile banking.
99 million U.S. adults will conduct mobile banking transactions at least once per year by 2014 – with 52% of mobile-phone users relying on smartphones.
... Mobile banking will rival online banking, with the former used as a “remote control” and the latter as a detailed form of control panel for more complex transactions.
... AT&T has the highest number of mobile bankers due to the iPhone’s influence, while Verizon Wireless has the lowest penetration for mobile bankers among the top tier U.S. wireless carriers.
“Mobile banking is quickly becoming an essential consumer capability,” said Mark Schwanhausser, Financial Services Channels Analyst. “Just as the iPod changed the music industry and their business models, our data shows that iPhone users are changing the banking industry by leading the way in monitoring and managing finances through mobile devices.”
What do you think? Post your comment below.
Wednesday, August 19, 2009
ET Phone Home
Posted by Mark Brousseau
Vijay Balakrishnan, president of StratEx LLC (770-598-5747, www.stratexllc.blogspot.com) passes along an article he wrote on the recent announcement by USAA that it will allow its customers to make deposits by iPhone:
Mobile phone cameras have captured images of everything from election protests in Iran to the recent tragic collision of a helicopter and a small plane over the Hudson River. So, what could one possibly add to the list of things that would intrigue mobile shutterbugs? With apologies to Mr.McGuire in the movie The Graduate, "I have just one word for you. Just one word.....checks."
The recent announcement from USAA, allowing its customers to make deposits by sending images of checks taken with their Apple iPhones, brings together technologies from the 19th and 21st centuries. Until the advent of Check 21, the movement of deposited funds depended on the physical transport of paper. An extensive retail branch network was developed to act as collection points for deposited paper. USAA, which serves 7.2 million active and retired members of the U.S. military and their families from one branch in San Antonio, has consistently used technology to turn conventional wisdom on its head. Three years ago, it announced its Deposit @Home service that allows customers to make deposits by sending images of checks scanned at home. Despite early scepticism from many, USAA claims 150,000 users. The addition of mobile smart phones takes the remote capture notion even further.
In addition to this announcement, mobile deposit technology provider Mitek Corporation has announced relationships with Fiserv, RDM, NCR, and J&B Software to take the capability to their customers. As these formidable players get past their pilots and launch offerings, we will likely see more financial institutions make mobile deposit services available.
What about fraud, you say? Doesn't Check 21 require account and transit information to be read magnetically to ensure security? While I admit that the prospect of sensitive check images flying through the air can be unnerving, and there are issues of authentication, privacy and data integrity that need to considered (another post, another day), the fact is that there is no regulation that requires that the magnetic ink character recognition (MICR) information be read magnetically. In fact, Check 21 is silent on the subject. Thus absent regulation, it falls to the individual financial institution's tolerance for risk, versus the obvious convenience of the service.
There are two factors that can mitigate risk to some extent: the old dictum of knowing your customer (KYC), and the option to delay funds availability until the check has cleared. I believe we will see the adoption of mobile deposit capture in defined communities such as the USAA customer franchise, where the financial institution has a very good idea of risk exposure. Credit unions with well defined memberships are more likely to offer this service than banks (and like USAA, most credit unions are also not extensively branched allowing them to make virtue out of necessity). We will likely see the service offered to the "safest" customers first, based on their deposit history, followed by a gradual expansion using funds availability agreements as a tool to calibrate exposure.
The banking community at large has a different challenge. Deposit acceptance is arguably the raison d'etre for large retail branch networks. Remote capture in general, and mobile deposit in particular, poses an interesting channel conflict paradox (see BAI Insights for a summary of a presentation I did with Bob Meara from Celent on the RDC/Branch paradox). Thus, my take is that banks (particularly the larger ones) will perceive mobile deposit as a bridge over troubled waters and be reluctant to put their branch network at risk.
While I don't see the airways saturated with check images from mass deployment, I believe mobile deposit will do well through niche (not necessarily small) adoption. Technology providers, transaction processors, and financial institutions all have different but related niche marketing challenges ahead. Astute target market selection will likely govern success. The alignment of factors like service and product features, pricing (ex: who pays for the data plan for zapping all those images, and what's the payback?), as well as path-to-market partnerships, are imperatives to be carefully considered.
What do you think? Post your comment below.
Vijay Balakrishnan, president of StratEx LLC (770-598-5747, www.stratexllc.blogspot.com) passes along an article he wrote on the recent announcement by USAA that it will allow its customers to make deposits by iPhone:
Mobile phone cameras have captured images of everything from election protests in Iran to the recent tragic collision of a helicopter and a small plane over the Hudson River. So, what could one possibly add to the list of things that would intrigue mobile shutterbugs? With apologies to Mr.McGuire in the movie The Graduate, "I have just one word for you. Just one word.....checks."
The recent announcement from USAA, allowing its customers to make deposits by sending images of checks taken with their Apple iPhones, brings together technologies from the 19th and 21st centuries. Until the advent of Check 21, the movement of deposited funds depended on the physical transport of paper. An extensive retail branch network was developed to act as collection points for deposited paper. USAA, which serves 7.2 million active and retired members of the U.S. military and their families from one branch in San Antonio, has consistently used technology to turn conventional wisdom on its head. Three years ago, it announced its Deposit @Home service that allows customers to make deposits by sending images of checks scanned at home. Despite early scepticism from many, USAA claims 150,000 users. The addition of mobile smart phones takes the remote capture notion even further.
In addition to this announcement, mobile deposit technology provider Mitek Corporation has announced relationships with Fiserv, RDM, NCR, and J&B Software to take the capability to their customers. As these formidable players get past their pilots and launch offerings, we will likely see more financial institutions make mobile deposit services available.
What about fraud, you say? Doesn't Check 21 require account and transit information to be read magnetically to ensure security? While I admit that the prospect of sensitive check images flying through the air can be unnerving, and there are issues of authentication, privacy and data integrity that need to considered (another post, another day), the fact is that there is no regulation that requires that the magnetic ink character recognition (MICR) information be read magnetically. In fact, Check 21 is silent on the subject. Thus absent regulation, it falls to the individual financial institution's tolerance for risk, versus the obvious convenience of the service.
There are two factors that can mitigate risk to some extent: the old dictum of knowing your customer (KYC), and the option to delay funds availability until the check has cleared. I believe we will see the adoption of mobile deposit capture in defined communities such as the USAA customer franchise, where the financial institution has a very good idea of risk exposure. Credit unions with well defined memberships are more likely to offer this service than banks (and like USAA, most credit unions are also not extensively branched allowing them to make virtue out of necessity). We will likely see the service offered to the "safest" customers first, based on their deposit history, followed by a gradual expansion using funds availability agreements as a tool to calibrate exposure.
The banking community at large has a different challenge. Deposit acceptance is arguably the raison d'etre for large retail branch networks. Remote capture in general, and mobile deposit in particular, poses an interesting channel conflict paradox (see BAI Insights for a summary of a presentation I did with Bob Meara from Celent on the RDC/Branch paradox). Thus, my take is that banks (particularly the larger ones) will perceive mobile deposit as a bridge over troubled waters and be reluctant to put their branch network at risk.
While I don't see the airways saturated with check images from mass deployment, I believe mobile deposit will do well through niche (not necessarily small) adoption. Technology providers, transaction processors, and financial institutions all have different but related niche marketing challenges ahead. Astute target market selection will likely govern success. The alignment of factors like service and product features, pricing (ex: who pays for the data plan for zapping all those images, and what's the payback?), as well as path-to-market partnerships, are imperatives to be carefully considered.
What do you think? Post your comment below.
Saturday, June 6, 2009
Key Criteria for Mobile Solutions
By Mark Brousseau
A new white paper from Fiserv, Inc. says there are 10 key criteria for selecting a mobile financial services solution:
A new white paper from Fiserv, Inc. says there are 10 key criteria for selecting a mobile financial services solution:
- Flexible enrollment
- Ability to deliver banking services via SMS, WAP and downloadable applications from one provider
- Consolidated enterprise platform
- Adaptable and scalable solution
- Extended functionality
- Mobilizing and streamlining business processes
- Proven premium services
- An integrated platform that lowers the total cost of ownership and interfaces with core banking, online banking and electronic billing and payment systems
- Bank-centric
- Multiple deployment options
What do you think? Post your comments below.
Smartphones and Mobile Banking
By Mark Brousseau
Smartphones will have a tremendous impact on mobile banking, Alain DeSouza, senior manager, Market Development, Solutions Marketing, at Blackberry, told attendees at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas yesterday.
DeSouza noted that, depending on the analyst numbers you believe, smartphones represent 20 to 26 percent of the mobile phones in the United States, and 12 to 14 percent of the mobile phones globally. When you consider that 4 billion people worldwide have mobile phones (with 1.3 billion mobile phones purchased annually) there is a lot of opportunity for smartphone mobile banking applications.
“Mobile banking will be one of the top seven applications people will have,” DeSouza said. He predicts the mass market adoption of mobile banking applications and that more companies will leverage mobile applications in general as a means of entering and exploiting new demographic segments.
And while iPhone has been getting a lot of the smartphone buzz, “the gorilla in the smartphone industry globally is Nokia, even though Blackberry leads the U.S. market,” DeSouza said.
What do you think? Post your comments below.
Smartphones will have a tremendous impact on mobile banking, Alain DeSouza, senior manager, Market Development, Solutions Marketing, at Blackberry, told attendees at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas yesterday.
DeSouza noted that, depending on the analyst numbers you believe, smartphones represent 20 to 26 percent of the mobile phones in the United States, and 12 to 14 percent of the mobile phones globally. When you consider that 4 billion people worldwide have mobile phones (with 1.3 billion mobile phones purchased annually) there is a lot of opportunity for smartphone mobile banking applications.
“Mobile banking will be one of the top seven applications people will have,” DeSouza said. He predicts the mass market adoption of mobile banking applications and that more companies will leverage mobile applications in general as a means of entering and exploiting new demographic segments.
And while iPhone has been getting a lot of the smartphone buzz, “the gorilla in the smartphone industry globally is Nokia, even though Blackberry leads the U.S. market,” DeSouza said.
What do you think? Post your comments below.
Friday, June 5, 2009
Cardholders Going Mobile
By Mark Brousseau
Below are some insights on mobile banking from the Third Annual Mobile Commerce Summit this week at The M Resort in Las Vegas.
… Cardholders have become increasingly more comfortable moving account information via the mobile channel, Kevin Morrisson, assistant vice president, Card Products, H&R Block, told attendees.
… Within six months of launch, financial institutions average 1.5 to 2 percent of their Internet users accessing mobile banking, Scott Moeller, chief executive officer, MShift, Inc. said during a breakfast briefing.
… Huntington Bank surveyed its mobile banking customers and found that 65 percent of them were likely to use mobile banking in the future, Ellen Johnson of Huntington Bank told attendees. Most importantly, 48 percent of respondents were very likely to recommend Huntington to another person because of the bank’s mobile banking offering.
… Huntington Bank’s mobile banking customers are 38 percent more profitable than the rest of the bank’s customer base, Johnson told attendees.
… Mobile phones are the preferred channel for global remittance because of their prevalence, speed and accessibility, T. Jack Williams, CEO, eCommlink, told attendees. “As an industry we need to focus on the ‘last mile’ of global remittance to truly open up the opportunity,” Williams said.
… When you look for a processor for your mobile payments initiative, select a partner committed to mobile for the long run, Williams told attendees. The processor needs to be able to support mobile traffic (short code support), must be compliant with SAS 70 and PCI, and must have an API library for a variety of mobile functions.
… Merchant agenda will need to be addressed by mobile payments or they will never adopt it, Williams said.
… More than 40 percent of mobile banking users are not online banking users, finds Aspen Marketing Services. This means that a mobile marketing initiative that largely focuses on online banking users (a common approach) will potentially ignore more than half of a bank’s customer base.
What do you think? Post your comments below.
Below are some insights on mobile banking from the Third Annual Mobile Commerce Summit this week at The M Resort in Las Vegas.
… Cardholders have become increasingly more comfortable moving account information via the mobile channel, Kevin Morrisson, assistant vice president, Card Products, H&R Block, told attendees.
… Within six months of launch, financial institutions average 1.5 to 2 percent of their Internet users accessing mobile banking, Scott Moeller, chief executive officer, MShift, Inc. said during a breakfast briefing.
… Huntington Bank surveyed its mobile banking customers and found that 65 percent of them were likely to use mobile banking in the future, Ellen Johnson of Huntington Bank told attendees. Most importantly, 48 percent of respondents were very likely to recommend Huntington to another person because of the bank’s mobile banking offering.
… Huntington Bank’s mobile banking customers are 38 percent more profitable than the rest of the bank’s customer base, Johnson told attendees.
… Mobile phones are the preferred channel for global remittance because of their prevalence, speed and accessibility, T. Jack Williams, CEO, eCommlink, told attendees. “As an industry we need to focus on the ‘last mile’ of global remittance to truly open up the opportunity,” Williams said.
… When you look for a processor for your mobile payments initiative, select a partner committed to mobile for the long run, Williams told attendees. The processor needs to be able to support mobile traffic (short code support), must be compliant with SAS 70 and PCI, and must have an API library for a variety of mobile functions.
… Merchant agenda will need to be addressed by mobile payments or they will never adopt it, Williams said.
… More than 40 percent of mobile banking users are not online banking users, finds Aspen Marketing Services. This means that a mobile marketing initiative that largely focuses on online banking users (a common approach) will potentially ignore more than half of a bank’s customer base.
What do you think? Post your comments below.
Security Stymies Mobile Banking
By Mark Brousseau
Security fears are the single biggest factor inhibiting mass consumer uptake of mobile banking, Tom Wills, senior analyst, Security, Fraud and Compliance at Javelin Strategy & Research, said yesterday at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas.
When it comes to mobile banking, 47 percent of consumers surveyed by Javelin Strategy & Research cited security as the thing they are most concerned about, Wills said. “No other category comes close.” Additionally, 73 percent of consumers are concerned that hackers will get access to their mobile phone.
But many consumer fears about mobile banking security are misplaced, Wills said. “There is lots of misinformation and misperception,” he told the audience of 98. “For instance, there is a perception that there is a lot of malware in the mobile banking channel. That’s not true. But it doesn’t matter that a consumer is wrong; if they are concerned, it’s lost revenue for banks.”
Wills added that, “The mobile channel is one of the safest around, if good security is implemented. It has some innate security safeguards.”
Those comments notwithstanding, banks need to be prepared to deal with fraud in mobile banking, Clint Heyworth, attorney, Consumer Finance Group, Chambliss, Bahner & Stophel told attendees.
“Mobile payments are going to happen. That is a given,” Heyworth said. “Fraud is also going to happen. That also is a given. Stealing is not a new concept. Mobile banking is just a new forum for theft and fraud. Companies need to decide how to stop it.”
So, why haven’t we heard more about instances of mobile banking fraud? “Not enough people are using it, and there isn’t enough money going through it,” Eric Kraar, senior architect, Firethorn, told attendees.
Kraar noted that the myriad operating systems in mobile banking strengthens security for the channel because it “makes it harder to get at a lot of people with one attack.” Conversely, it also means that vendors can’t focus their security efforts in any one area. “We can’t come up with one solution that fits everything,” Kraar said.
What do you think? Post your comments below.
Security fears are the single biggest factor inhibiting mass consumer uptake of mobile banking, Tom Wills, senior analyst, Security, Fraud and Compliance at Javelin Strategy & Research, said yesterday at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas.
When it comes to mobile banking, 47 percent of consumers surveyed by Javelin Strategy & Research cited security as the thing they are most concerned about, Wills said. “No other category comes close.” Additionally, 73 percent of consumers are concerned that hackers will get access to their mobile phone.
But many consumer fears about mobile banking security are misplaced, Wills said. “There is lots of misinformation and misperception,” he told the audience of 98. “For instance, there is a perception that there is a lot of malware in the mobile banking channel. That’s not true. But it doesn’t matter that a consumer is wrong; if they are concerned, it’s lost revenue for banks.”
Wills added that, “The mobile channel is one of the safest around, if good security is implemented. It has some innate security safeguards.”
Those comments notwithstanding, banks need to be prepared to deal with fraud in mobile banking, Clint Heyworth, attorney, Consumer Finance Group, Chambliss, Bahner & Stophel told attendees.
“Mobile payments are going to happen. That is a given,” Heyworth said. “Fraud is also going to happen. That also is a given. Stealing is not a new concept. Mobile banking is just a new forum for theft and fraud. Companies need to decide how to stop it.”
So, why haven’t we heard more about instances of mobile banking fraud? “Not enough people are using it, and there isn’t enough money going through it,” Eric Kraar, senior architect, Firethorn, told attendees.
Kraar noted that the myriad operating systems in mobile banking strengthens security for the channel because it “makes it harder to get at a lot of people with one attack.” Conversely, it also means that vendors can’t focus their security efforts in any one area. “We can’t come up with one solution that fits everything,” Kraar said.
What do you think? Post your comments below.
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