Banks in Danger of Becoming the “Dumb Pipes” of the Mobile Payments Industry
February 21st, 2012By Dan Rowinski, RWW
Banks already play a central role in the day-to-day lives of consumers. There is huge potential for the banks to profit from the mobile payments evolution and they need to move quickly before the industry passes them by.
The major players are already setting up foundations to profit on the mobile payments revolution. Google has its Wallet initiative, the payment processors are investing heavily and the mobile operators (AT&T, Verizon etc.) are making sure that they are not being cut out of the loop. What about the banks? Transactions, especially on the local level, are what banks do. On a micro level, no other institution has as much influence on local merchants than the banks do. On a macro-level, the biggest banks are partners of the biggest retailers. Some of the biggest retailers (like Wal-Mart) have banking licenses of their own.
The race will be for consumer mind share. The mobile payments leaders will be the companies that consumers come to identify as those that add the most value and can be trusted with the most important of data; their money. Banks will have a place in that mind share. Whether it is as the “dumb pipe” that mobile payments are built upon or integral pieces of the economy remains to be seen.
