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Mobile Wallet Promises Big Payoff
Expand your mobile banking services. Strengthen your brand. Broaden your customer base. Differentiate your bank from the competition. And, even more important, create new revenue opportunities. These are among the potential benefits of the e-wallet, a much-anticipated smartphone packed with a multitude of banking and payments solutions. Unfortunately, despite the efforts of such major players as Google, Sprint, Paypal and Isis, the e-wallet has remained elusive in the U.S. market ... until now.
FIS, one of the world’s largest providers of banking and payments technology, has entered the e-wallet sweepstakes with its new mobile wallet, a cloud-based payment solution that can be built into any financial institution’s existing mobile banking applications, thus enhancing brand and customer loyalty.
“FIS Mobile Wallet is unique in its ability to support existing smartphones and existing point-of-sale hardware, while still being forward-compatible with new technology as it becomes available,” said Doug Brown, FIS senior vice president of mobile financial solutions. “This enables financial institutions to launch a mobile wallet today, and to attract and retain customers via their own financial institution-branded mobile payment solutions.”
Success of the e-wallet — and digital banking in general — ultimately hinges on merchant and consumer adoption. Retailers must see the benefits of mobile payments, which FIS understands. Its mobile wallet has the ability to promote advertising, couponing and companion offers to consumers, thus enhancing the ability to generate sales. Currently, it uses quick response, or QR, codes to execute transactions. Payments are processed via a software connection through a secure cloud server and, therefore, do not require terminal updates by retailers.
E-wallet security is another major issue for consumers, merchants and financial institutions. A recent study by security company Symantec, for example, discovered that the majority of people who found a lost smartphone attempted to access financial and other information, rather than try to return the phone to its owner. Brown points out, however, that the FIS Mobile Wallet is uniquely secure because no payment credentials, such as credit card numbers, are stored on the smartphone. Even more impressive, the customer’s private information is not even provided to the POS device, thus ensuring total security on the bank and the merchant sides of a transaction and eliminating PCI compliance burdens for merchants.
“As the mobile wallet replaces the traditional wallet,” said Brown, “there is the potential for a profound change in consumer behavior, as well as the way financial institutions and merchants engage their customers. The anytime, anywhere nature of mobile and online represent an unparalleled level of convenience that consumers will continue to embrace.”
This is putting more pressure on banks. In fact, Brown believes banks must provide the channels consumers want for accessing and managing their financial information. He recommends four best practices to strengthen banks’ position in the digital world:
- Work with your financial services technology provider to discuss your business needs and digital/mobile strategy.
- Leverage your mobile solution integrated into your core and e-banking solutions.
- Think beyond traditional mobile and online banking. These are table stakes. Have a plan for remote deposit capture, mobile payments and digital money movement.
- Encourage employees to be enrolled and active in your mobile and online channels.
Younger generations that have grown up with this mobile technology expect their financial providers to offer these services, stores in which they shop to handle their e-wallet transactions and their e-wallets to be completely secure.
Michael Scheibach is executive editor of BankNews.
Copyright (c) April 2012 by BankNews Media