To mobile self-service strategies specialist Richard Crone, whether to go with SMS (simple message service or text messaging), a mobile Web service or a downloadable application that resides on the device is significant but may beg the larger point.
The prize to keep an eye on in the mobile services arena, Crone said, is bill pay, the second in what he sees as the three waves of mobile services (the first is mobile banking; the third, mobile marketing.)
"The one who enrolls is the one who controls," said Crone, a consultant to credit unions, banks, carriers and other vendors.
"Consumer research conclusively shows that consumers want to pay on their phones, and they are not only willing to pay more for phones with payment capabilities, but, more importantly, they are willing to switch carriers for it," he said.
"The same Visa study," Crone added, "also showed that 58% of those consumers are willing to move to another financial institution for that service, too."
And while financial institutions jostle for end users --and mobile technology providers jostle to provide the tools they'll use--Crone said the real "sleeping giant here" are the carriers themselves--the Verizon Wireless, AT&T and Sprints of the world.
"They really are in the payments business already today, and if one of them was to make a bold move and buy an existing payments brand, it's game on!" Crone said.
That's because mobile carriers today are "unlike any entity in the history of payments innovation," he said. "They're already the biggest recurring billers in the world, they rank among the top 50 specialty retailers at physical points of sale and one of them has experience with the second-most successful credit card ever launched, the AT&T Universal card," he said.
So what's a credit union to do? First of all, don't sit on the sidelines.
"I'm amazed when I speak at conferences and ask how many credit unions collect cell phone numbers in their MCIF files. They need to do that, and if they can include the carrier with that, they can do some low-cost to no-cost ways of communicating with members through the mobile channel," he said.
For instance, Crone said, if a credit union knows a member is on Verizon Wireless, he or she can be encouraged to sign up for member-defined alerts and notices that can be sent via text message just by using cell phone email@example.com.
"Every carrier has that capability, and it costs nothing," Crone said.
As the mobile banking market continues to develop, partnerships of various stripes are popping up. Individual credit unions and banks are partnering with suddenly well-known names like MShift, Firethorn and mFoundry. And providers of the range of delivery channels to credit unions are joining in, too.
National Fidelity Information Services, for instance, has partnered with vendors to offer all three channels of delivery--SMS, Web-based and embedded applications. And PSCU Financial Services, the largest CUSO, is offering a mobile application from mFoundry, which itself sees the solutions as evolving quickly toward providing the complete "mobile wallet."
"Mobile banking is the first step, and it's relatively easy to do now," said that company's chief operating officer, John Pizzi, who noted that online banking paved the way for that channel.
"Now we're moving onto payments, where you're seeing more and more players," Pizzi said. "That's an extremely personal touch point that banks and credit unions in particular need to own, and this is the first step in the process. It's becoming a self-service world and phones are in the middle of it."
Meanwhile, the real end game going forward may be mobile payments at the point of sale.
"This could be huge," said Crone, the payments consultant. "If you take away all the eBay and PayPal transactions on the Internet, P2P sales may be $20 billion, compared with $6.2 trillion at the point of sale."
"Allowing people to make purchases at the point of sale using their phones is where it's going...and it could be a fatal attraction for any credit union to think that that channel won't be viable."
"We're getting to the point where all consumers want payment on their phone, if nothing else as a backup," Crone said. "Think about it. If you lose your wallet, it might take a few hours for you to figure it out. If you lose your cell phone, it's more like six minutes."