What We’re Reading: Online Payments, Tablet & Mobile Banking and Cyber Monday
Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.
- Online Payments Shifting from Debit to Credit Cards, Report Finds
Assuming new Federal Reserve Board rules regulating debit card interchange stand, total U.S. consumer payments volume from online use of credit cards will climb 63% during the five-year period from 2011 to 2016, while debit card online-payment volume will rise by just 2%, according to Javelin Strategy & Research’s latest Online Retail Payments Forecast report. “After several years of declining use, credit cards are poised for resurgence,” Beth Robertson, Javelin director of payments research, said in a Nov. 28 press release. “Despite the nation’s very rocky economic recovery, consumers appear to have halted their belt-tightening, and bank incentives to use credit cards rather than debit are gaining appeal.” Javelin predicts a 16% increase from last year in the U.S. online market as retail e-commerce sales rise to $309 billion in 2011 and to $444 billion by 2016.
- Yodlee Taps Open Solutions for FinApp Partner
Yodlee Inc. said Open Solutions Inc. of Glastonbury, Conn., will be the California company’s first channel partner to offer its customizable personal financial management platform and app store for institutions. The Yodlee Platform with FinApp Center includes a consumer-driven marketplace for personalized financial applications. Yodlee said it certifies each FinApp so financial institutions can choose and present secure, personalized functionality through their own websites, the company said. The FinApp center will be integrated into Open Solutions’ DNAweb online banking system, the companies said.
- Alt Marketing: Bank of America Helps Feeding America on Cyber Monday
Yesterday, NetBanker looked at several financial institutions using Black Friday/Cyber Monday to promote banking products. But it’s also a great time to focus on community outreach and charitable pursuits, a tack taken by Bank of America. The bank is supporting Feeding America, which leverages a small amount of cash, into a large number of meals by tapping bulk food donors. It says that every dollar donated translates into 8 meals. Bank of America’s is providing $1 million outright plus an additional $500,000 pledged in matching funds.
- Banking by smartphone catches on, will increase
With telephones now serving as de facto personal computers for many, financial institutions are rapidly jumping on the mobile banking bandwagon. “It’s exploding the way Internet banking exploded a few years ago,” said Debbie Jemison, a spokeswoman for the Illinois Bankers Association. A 2010 survey showed that, while just 27 percent of banks in Illinois offered mobile banking, 89 percent of the others were looking to add it in the near future. Banking via smartphone is also an aspect of finance that PNC Bank’s Area Regional Manager Jason Pals did not see coming when he entered the industry in 2000. “Of course no one was using mobile banking, but estimates are 40 percent we’ll be using it by next year,” said Pals.
- Banks scrambling to serve tablet users
With the success of Amazon’s new Kindle Fire tablet on the heels of Apple’s pioneering iPad, the growing number of tablet users like Davis who want to do their banking on the device are likely to notice something lacking in the experience. Of the nation’s biggest banks, only 30 percent offer a tablet-specific app, says Mary Monahan, the head of mobile devices research at Javelin Research & Strategies. And that’s just for iPad users. So far, none of the banks have a specific application for iPad’s Android-based competitors that are gobbling up market share, including Kindle Fire. “We’re seeing the opportunity coming alive right before our eyes,” says John Flora, director of product management for mobile for Intuit Financial Services
- Banks Stumble Along Tech Frontier
In September, Google Inc. introduced phones that are embedded with a chip that allows consumers to make payments by tapping their phones against a device at the cash register. Visa Inc. and MasterCard Inc. are backing the technology, and merchants such as American Eagle Outfitters Inc., Jack in the Box Inc. and Macy’s Inc. are accepting the payment method. For mobile payments to take off, “something has to be in it for the consumer and something has to be in it for the merchant,” said Paul Galant, chief executive of Citigroup’s Global Enterprise Payments group, which designs payment solutions for consumers, corporations and governments. The banking industry, led by J.P. Morgan Chase & Co., flooded customer mailboxes with new cards that cost $2 to produce, compared with 20 cents for a traditional card with a magnetic strip.