The Mobile Mainstream


“Changing consumer preferences and behaviors are focused on ease of use, convenience, and immediacy of payment that can be obtained through the mobile channel,” reports the Federal Reserve Bank of Boston in its most recent mobile payments study.

Yet the mobile experience in the mainstream of U.S. commerce hardly meets that ideal.

“Mobile banking is now considered mainstream in the U.S. Most FIs view it as part of their core business strategy and an important customer service channel.” Indeed, the survey shows that 89% of financial institutions offer mobile banking.

Mobile payments remain far less than mainstream. “Most FI respondents have yet to offer mobile payment services,” the Boston Fed study shows. “On a consolidated basis, just 24% (of responding respondents) on average indicated that they offered or supported mobile payments.” Some 44% plan to, mostly in reaction to competition from other financial institutions.

The latest research from Cornerstone Advisors sounds a similarly downbeat tone for the mainstream state of mobile financial services, showing adoption of mobile banking itself at only 26% at mid-sized banks.

Online banking doesn’t fare much better, for that matter. The Cornerstone survey reports that “just 51% of mid-size banks’ checking account holders banked online in 2017, and only 11% paid bills online through their banks.”

The U.S. mainstream doesn’t seem to care much for mobile or online financial services. In 2016, when the FRB Boston survey went out, market-research firm eMarketer reported that branded mobile-wallet usage was low, growing fast, but still far from mass adoption. Fewer than 20% of consumers used their mobile devices to make payments at the point of sale. Mobile P2P payments showed the fastest growth, led by the youngest consumers.

FRB Boston’s conclusions follow along the same lines. “Consumer expectations for the mobile/digital channels are expanding as new use cases evolve. . . . The convergence of payment channels is blurring the lines between ecommerce, mobile, and physical retail environments,” with merchants making it easier for consumers to shop and pay with their mobile devices over online channels.

Given that the resulting payment transactions simply end up as credit- and debit-card transactions, which an update to the Fed’s recent payment study shows are the fastest-growing transactions, it may not matter. The cash comes in, and the fees are collected.

Still, the mobile payment experience in China (see the first link below) suggests that a more convenient option, when it arrives, will change consumer preferences and behaviors. Just like the Federal Reserve Bank of Boston says.

The cashless society has arrived – only it’s in China

The story is China, where mobile payments rule, is not encouraging for financial institutions, where Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are “changing how people shop, borrow – even panhandle” and taking a growing role in daily commerce at the expense of banks, according to the Wall Street Journal. “Their success offers a glimpse of a future where technology firms drive innovations in finance just as they have in retailing, autos and the media,” reports Alyssa Abkowitz.

10 banking channel metrics that have dramatically changed in 10 years

The mobile and online banking statics reported at the top of this issue come from the annual Cornerstone Advisors channel research study. The other channel stats are equally enlightening.

Citi wants you to help shape digital banking

Bank data is locked up pretty tightly in the vault. In Europe, PSD2 regulations are in effect to give the combo to third-party competitors. Here in the United States, we have some initial calls from regulators to open it up. Now Citibank is testing a feature that would “give you a full picture of your financial health,” writes Bankrate’s Robert Bara. “Citi’s initiative is not a trivial move, because until now banks have tended to take a head-in-the-sand approach to the customer’s relationships with other financial players.”

Institutional Investor names its Fintech Finance 40

Here are the investment bankers who made Institutional Investor’s 2017 Fintech Finance 40 ranking. These finance leader are “helping to move innovative ideas from the laboratory to commercial viability.”

CBInsights names its FinTech 250 for 2018

The market intelligence firm lists the 250 “most promising, private fintech companies from around the world.”


Please take my KODAKCoin away. In the “if you call it a blockchain or add a crypto feature, your company will become more valuable” department, there’s KODAKCoin. I like Bloomberg View’s Matt Levin on what’s “sort of cool” and what’s simply impractical about following the trend of the moment. In his words:

Kodak wants to run a web crawler and a central database of photographs. You don’t need to do that on the blockchain. It also wants to run a marketplace to match buyers and sellers of photographs. Again you don’t need to do that on the blockchain. You certainly don’t need your own currency to do that; lots of markets — the stock market, the supermarket, the existing market for photographic licensing — run on dollars, and what is convenient about dollars is that if you get dollars for licensing your photographs you can spend them at the supermarket.