Awareness Proving a Problem for Banks and Mobile Payments
Banks have long been the Washington Generals of mobile payments; they’re trying, sure, but they just have a much harder time beating those high-flying, ultra-fancy options being generated by mobile devices and their Harlem Globetrotters-style mobile payment systems. A new report finds that, indeed, banks are lagging, and ignorance of faster payment solutions is doing at least some harm.
The study, staged by WesPay, examined 430 financial institutions in the western United States, and discovered that not only were these banks not bringing in faster payments products, many of these banks didn’t even know these payments products existed to begin with.
Fifty-seven percent of respondents noted that bringing out faster credits for same-day automated clearing house (ACH) systems “has had no measurable impact on our customers / members’ transactions.” Meanwhile, 34 percent didn’t know there was such a thing as the Faster Payment Task Force at the Federal Reserve, and 46 percent had only “high-level” knowledge.
If you’re finding that troubling, you’re not alone. Even the banks are concerned about this point, as 60 percent of respondents noted that faster payments initiatives are “…an important standard in the industry.” Banks are taking a “wait-and-see” posture to see just which platform becomes the new standard.
This is useful plan, even if it looks like laziness. Sure, banks could frantically get their systems set up for one payment system or another, but should they back the wrong pony, it could ultimately render a lot of setup nothing but waste. So by holding out, they’re taking the reasonable, responsible path and not committing a lot of resources to what might be the standard by sheer luck alone.
However, those who move first on faster payments may ultimately become the leaders in the field. Payments in general are a constantly-evolving industry, and those who aren’t keeping up are likely to falter. Granted, banks have an edge in name recognition and greater perception of safety, but if banks can’t keep up on the speed and convenience side, they’re likely to falter.
It’s a balancing act, and one the banks are working hard to remain stable in the midst of. Waiting for a clear winner to come out is a rational move, but it might be one that hampers progress going forward.