More than half of the consumers interested in paying for goods with their smart phones do not want the service provided by their main bank, according to a study due on Monday.
Eight out of 10 consumers said they would consider online payment provider PayPal Inc, owned by eBay Inc
The findings show that banks face a threat to their payments business if they do not keep up with fast-changing technology, said Peter Olynick, card and payments leader at Carlisle & Gallagher, a Charlotte, North Carolina-based firm that does work for some of the largest U.S. banks.
Banks make big money from moving money from buyers to sellers through credit and debit card networks. But smart phone payments may undermine that business, if companies find new networks to move money, such as cell phone networks.
The survey of more than 600 consumers found that 48 percent were interested in “mobile wallets,” or technology that transforms smart phones into payment tools. Of them, 53 percent said they would prefer an alternate provider over their primary bank.
The study asked customers about brand preferences, but did not ask about specific services. Among potential mobile wallet features, customers favored banks for basic financial services, but saw them as weaker when it came to providing coupons, product reviews and shopping assistance.
Pay by phone
A host of banks, technology companies and telecommunications providers are exploring mobile wallets on their own and in partnerships.
PayPal has said it has made deals with 15 retailers that will allow consumers to pay for purchases with their cellphones. Google has teamed up with credit card companies, Citigroup Inc
Bank of America Corp
JPMorgan Chase & Co
Wells Fargo & Co
The competitive threat to the payments business comes as banks absorb new regulations that crimped the “interchange fees” they charge merchants when consumers swipe debit cards.
If banks fall behind in mobile wallets, they could lose more of their banking business, Olynick said. Of the consumers most attracted to mobile wallets, more than 80 percent would consider using banking services from PayPal if the company offered them, he said.
Publish date: June 5, 2012 9:11 am| Modified date: December 18, 2013 10:26 pm