U.S. mobile banking counts on apps to grow

BANGALORE, INDIA: Want to transfer money on the move? There's an app for that.

As the popular Apple Inc advertisement goes, more Americans are discovering the benefits of mobile banking and the applications that facilitate it.

The rising popularity of applications, the proliferation of smartphones and greater familiarity with text messaging are driving the use of banking services on mobile phones.

As smaller banks follow large banks in offering mobile banking services, this year will see a further acceleration of growth.

"Applications are seeing tremendous adoption," said Kay Nichols, executive vice president of FIS Channel Solutions, a unit of electronic payment processor Fidelity National Information Services Inc.

"Part of the adoption growth is tied to a combination of heavily subsidized handsets and lower 'all you can eat' data plans from mobile network operators."

"It's clear the American mobile phone subscriber is beginning to expect more from their phones," Nichols added.

People use applications to look up bank balances, view transaction history and locate a branch or ATM. Apple's iPhone, Research In Motion's BlackBerry and Google's Android-based phones have been the top destinations for applications.

"The most popular bank applications for the iPhone are from Bank of America, JPMorgan Chase & Co, Wells Fargo," said Red Gillen, a senior analyst at research and consulting firm Celent.

Smartphone market leader Nokia has struggled to meet with similar success so far.

"Should Nokia get its act together on apps, I expect their phones to drive app growth as well," Gillen said.

Mobile banking services, which have started to take off in the United States over the past two years, allow users to make payments, check balances, transfer money between accounts and generate statements of recent transactions on their handsets.

About 1,000 banks currently offer mobile banking, out of some 30,000 financial institutions in the United States alone, said Charles Landry, executive vice president at Syniverse Technologies Inc.

"The U.S. mobile banking market is moving beyond its infancy toward core adoption," Landry said.

"So as you can see, there is still a lot of room to grow."

Syniverse manages the delivery of mobile messages for financial institutions through relationships with wireless carriers.

The United States has more than 10 million mobile banking users, Nichols of FIS Channel Solutions said, citing market researchers.

Smart wallets

An emerging trend is payments, with customers showing an increasing willingness to use their phones as mobile wallets.

"In 2010, we will see a huge change in the market moving towards payments by the end of the year," said Matthew Talbot, vice president of mCommerce at Sybase 365, another provider of mobile banking services.

Players like eBay Inc's Paypal, Visa and MasterCard are looking to control the payments market, as are banks and mobile carriers, Talbot said.

A majority of respondents to a recent survey said they were interested in using their phones to purchase items at a cash register the same way they would do with a credit or debit card.

Customers use their mobile phones as a shopping assistant to compare prices, access credit card details and to organize and track their gift card, loyalty and reward accounts, according to the survey commissioned by Firethorn, a Qualcomm company that offers mobile banking services.

"Mobile payments are still in the early phase in the United States as compared to Asia and India, where these types of services are more prevalent," Landry said.

"In the United States, the majority of mobile payment services offered today consists of a payment alert that triggers an action to make a payment."