Wells Fargo Leads the Pack With Mobile Banking Solutions

Implications: The demand for mobile banking is growing and Wells Fargo is leading the pack in providing m-banking solutions for its customers. Primarily, banks, processors, networks and mobile carriers are pushing two types of transactions with mobile devices, m-banking and m-commerce. The m-banking segment is expected to grow to $50 billion by 2010 and m-commerce transaction growth will surpass $36 billion by 2010. To set itself apart from competitors in the space Wells Fargo plans to offer numerous m-banking solutions to add value to its customers and gain greater control over customer's accounts before determining if SMS, NFC or WAP is the "killer application for m-transactions. m-banking allows customers to check balances (62%), account history (17%), transfer funds (11%), make bill payments & P2P payments (8%) and change your password (2%), whereas m-commerce transactions enable customers to  download music and ringtones, games, access the internet and conduct transactions at the POS.

Analysis: Wells Fargo, Citibank, Bank of America, Wachovia, BB&T and other banks and credit unions have launched or are in the pilot phase of launching m-banking to a select group of customers to test the available technologies, i.e. SMS, NFC and WAP, to determine which technology may earn "killer application" status. Several technologies are available for m-banking and m-commerce including NFC - Near Field Communication, SMS - Short Messaging Service and WAP - Wireless Application Protocol.

1.  SMS - technology exists on most mobile phones available in the market today and allow users to receive and send short text messages (from 150 - 160 characters) to other mobile phones and employ the use of an assigned PIN and confirmation; NFC - is a short-range (close-proximity) wireless connectivity technology (NFC based mobile payments may experience growth related to payment terminals already deployed for use with contactless payment cards)

2.  WAP - technology is an open, international standard for applications that use wireless communication and is primarily used to enable web access from mobile devices, i.e. internet access, music downloads, gaming, telecasts, etc. SMS & WAP technologies can be used in conjunction to configure mobile devices for short text messaging and internet access to make purchases and downloads

3.  Mobile carriers are pushing mobile devices equipped with NFC technology because carriers can control the mobile devices and they can charge users a data charge based on the type of transaction conducted or users must buy an unlimited data plan. Both Wells Fargo and Bank of America employ this model, but because NFC technology is more costly than SMS technology, carriers typically subsidize the costs of the mobile devices with this technology

Since May 2007, Wells Fargo has launched m-banking for corporate clients, launched an NFC pilot with Visa, launched m-banking for retail customers, small business customers and its latest launch of SMS - mobile text banking. It appears that Wells Fargo has strategically positioned themselves as the leader in m-banking and 2007 -2009 may prove to be the testing ground for m-transaction growth and the "killer application" i.e. SMS, NFC and/or WAP may rise to the occasion to meet  consumer demand for m-transactions.