8 Big Stories Transforming The Payments Landscape
4. Partnering On Mobile Payments?
Banks and nontraditional competitors teaming up may be the future of mobile payments.
Despite the hype, mobile wallets and mobile commerce haven't actually spread like wildfire among U.S. consumers. Though several wallet products have been released over the past two years, none has yet emerged from the pack to achieve widespread adoption. But with new partnerships popping up between banks and payments providers, that could soon change.
This summer, U.S. Bank took an interesting step by partnering with Square -- one of the notable "nonbank competitors" in the payments space -- and adding it to the bank's digital wallet options available to customers via their iOS and Android smartphones.
Dominic Venturo, chief innovation officer for U.S. Bank Payment Services, says that although Square competes with the bank in some areas, he believes this offering will ultimately provide convenience to its customers. "Square is a multifaceted company that, in some cases, does offer products that appear to compete with products we offer, and that's fine, we welcome competition," he says. "They also offer many consumers the convenience of the Square Wallet and the ability to pay with that wallet."
U.S. Bank views this as an extension of its payments infrastructure, Venturo adds, noting it will continue to "try new things" as customer preferences in payments shift.
Tom Kunz, senior VP of digital channels for PNC Bank, acknowledges that the hype outpaces actual usage of mobile wallets. But, like Venturo, Kunz says his bank believes it's important to be active in this space for customer convenience. PNC late last year made Visa's V.me digital wallet scheme available to its existing 1.2 million PNC Virtual Wallet customer accounts, with a commitment to make V.me available to more than 6.3 million accounts by the end of 2013. PNC was the first U.S. bank to integrate with Visa's new digital wallet service.
Kunz says mobile devices, specifically the tablet, "are drastically changing the way consumers shop." The fact that V.me stores consumer payment and shipping information to a single account and login so it doesn't have to be re-entered when shopping multiple websites makes it highly appealing, he notes.
"Mobile is a catalyst in every industry to reinvent the way you do business with your customer," Kunz adds. — B.Y.