Everybody wants to talk about mobile banking and payments. And no wonder: the heady combination of increasingly sophisticated mobile devices, banking services and payment options offers banks the opportunity to gain market share, tap into new revenue streams and reduce their overall cost to serve customers.
Terminology: Mobile banking vs. Mobile payments
Many consumers (and even a fair number of bankers) make the mistake of using these two terms interchangeably.
But there is a difference: Mobile Banking refers to platforms that enable customers to access financial services (such as transfers, bill payments, balance information and investment options).
Mobile Payments, on the other hand, is generally defined as the process of using a hand-held device to pay for a product or service, either remotely or at a point-of-sale.
Almost 85 percent of respondents to KPMG International’s online survey of bank executives say that mobile payments will have significant importance to their business within the next one to four years.
Our survey shows that a select group of banks are quickly moving ahead of their peers to gain customer loyalty, reduce costs and – ultimately – secure their place in the mobile payment value chain. Others, however, are waiting for standards to be set and for customer demand to hit critical mass.
But banks will quickly find that the specter of new, nimble and highly effective competitors taking control of the mobile payments market represents a clear and present danger. In fact, the traditional hegemony of banks over the payment process is certainly not guaranteed and is more at risk today than ever before.
And while there are – as yet – very few certainties in the mobile payment arena, our survey illustrates a number of key challenges, considerations and opportunities that are universally critical to banks as they develop their mobile banking and payments strategies.