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Friday, 30 September 2011 16:10

Mobile banking shakes, rattles and roars


Demand for mobile banking services has grown by 80 per cent in the year to date at Westpac - which is forecasting it will achieve the first million mobile users two times faster than it reached that milestone for fixed internet access.

George Lawson, head of merchant acquiring for Westpac, believes that within 10 years mobile banking and mobile payments will be entirely ubiquitous.

There are battles still to be fought though in terms of determining which mobile platform will become ubiquitous, as it is unlikely consumers will want to carry multiple mobile payment platforms the way they carry multiple credit or bank cards.

Speakers at a Mobile Payments Forum in Sydney, which was organised by the Australian Information Industry Association, pointed to a massive shake up in the way people accessed their banks, made payments and transferred money between one another as a result of the rise of mobile banking and mobile payments.

Oliver Weidlich, director of design and innovation and Mobile Experience said that the fact that almost one in two Australians now had a smartphone - partly as a result of the generous subsidies offered by the mobile carriers - meant that demand for mobile banking had soared to the extent that there were now 4 million people actively using mobile banking services. He pointed to a PayPal report released this week which showed that there were now 1,000 mobile transactions conducted each hour in Australia.

While the banks were innovating, Mr Lawson acknowledged that there was an entire partner ecosystem emerging which would lead to new payments linked products. He said he had seen a recent demonstration of a concept using the Microsoft X-Box Kinect product where the gesture of moving a hand to the mouth would signal a desire to purchase food online.

'That sort of innovation is likely to come from partners,' he said.

Rohan Ganeson, managing director of SMB business group for Optus, said that partnership models which might bring together communications companies, financial institutions and IT companies around the mobile financial platform were developing in the US. 'The challenge is who owns the customer? That is yet to be resolved,' he said.

Mr Lawson did not believe that would be a barrier long-term however as 'The customer will decide what she or he wants.'  What was more important to them than who they deal with was the ability to have 'banking on any device, any card, any network and any bank.'

Vipin Kalra, country manager for Visa agreed that in a successful mobile ecosystem the customer, rather than the service suppliers, would be at its centre.

Panellists were also questioned about the implication of Near Field Communication chips which could be integrated in future generations of smartphones, or made available using a mobile skin. According to Michael Walters, the panel moderator and a director of Edgar Dunn & Co, there are 100,000 payment terminals in Australia which would require upgrading to allow NFC payments to become ubiquitous.

Westpac's Mr Lawson said that while he believed NFC would succeed its application would be much broader than purely for payment services, and that it would be used increasingly for information access. He also believed that other proximity payment models would emerge using technologies such as QR codes.

He argued that the main game for banks wasn't around providing the mobile payments platform itself as this offered only 'very skinny' margins, but hinged around using mobile payments and mobile banking as a springboard for other value added services.

A white paper also released at the AIIA event, and written by Edgar Dunn & Co suggested that Australian demand for mobile banking and mobile payments would grow to the extent that mobile financial transactions would grow to 250 million a year by 2015.

The report - Mobile Payments- co-operate, collaborate or abdicate - meanwhile warns that financial institutions and mobile network operators could be marginalised unless they develop a co-ordinated cross industry approach.

It notes that to be successful long term a ubiquitous mobile financial platform will be required - and that a chain of different platforms used for different payments is ultimately unsustainable. It argues that; 'Some degree of cross-industry cooperation is required - whether between financial institutions and mobile network operators, payment brands and mobile handset platform owners or some other combination of two or three parties.

'And in all this jockeying it is worth remembering that it is the customer (consumers and merchants) who ultimately will determine the success of the service - and so their experience with mobile payments is paramount.'

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