Big Moves by Visa, Citi MMV in Mobile Banking Space

Things appear to be moving in the mobile financial services space in spite of the economic troubles. Just in the last week of October, both Visa (San Francisco) and New York-based Citi's Mobile Money Ventures (MMV) announced the rollout of initiatives designed to enhance the banking functionalities of people's mobile phones.

Visa has rolled out a pilot in Canada in cooperation with the Royal Bank of Canada (RBC) and Rogers Wireless in which users will be able to wave and pay for goods at the point of sale using their mobile phones. The pilot is first being tested with RBC employees and will then be introduced to consumers for testing in mid-2009, according to Visa.

Pilot participants will be issued specially equipped, near-field communications-enabled Motorola mobile phones that can simply be waved at Visa payWave-enabled checkout readers at select retail stores and fast food restaurants in Toronto's downtown. Visa declined to name the participating merchants.

According to Mike Bradley, head of product with Visa Canada, this is the first pilot of its kind in that country. "While no two pilots are alike, this Canadian pilot shares similarities with two successful pilots Visa conducted with Wells Fargo in the United States and with Maybank in Malaysia," he says. "Visa's mobile payment strategy is to apply the scale and flexibility of its global payment network to deliver payments on mobile devices that have immediate value to consumers, merchants and issuers."

Figures from Visa research indicate that Canadian consumers are interested in using their phones to pay for things wirelessly—more than half of respondents to a Visa survey were "definitely" or "somewhat interested" in purchasing a mobile phone with payment capabilities.

Although Bradley couldn't specify the particular model of Motorola phones, each will contain a secure chip and antenna to wirelessly transmit Visa card information from the mobile phone to the merchant terminal. From there, the transaction is processed in the same way as a regular credit card payment. "The mobile phone acts as the payment device, the same way as a contactless Visa card. The phone also allows us to load and reissue Visa card information if required," he explains.

Visa and RBC have been working together on mobile payments services since Nov. 2007. According to Bradley, RBC was the first Canadian financial institution to offer a credit card with chip technology nationwide and announce its intentions to offer Visa payWave on its cards. He says that similar security features to what is found on the chip cards will be incorporated into the mobile phone payment technology.

Meanwhile, in Asia, customers of Citibank Hong Kong will be able to perform mobile banking and stock trading using the new platform from Mobile Money Ventures, the JV between Citi and SK Telecom (Seoul). Part of the rollout includes a customized application for users of Apple's iPhone 3G for mobile stock trading.

MMV's m-banking platform is independent of device and network. Among the features that Hong Kong customers can use are account inquiry and management, funds transfers, payments and time deposit accounts. Also available is stock trading, including buying and selling, pending order management, stock quotes and portfolio management. The platform is secured with dual-factor authentication.

According to the company, MMV supports and has certified a variety of handsets sold in Hong Kong as capable of supporting mobile banking services. It offers a maintenance and support program for its customers that includes 24/7 mobile experts support on-site for a higher level of service, technical troubleshooting advice via a customer help desk and the facilitation of training programs.

"Our work with Citibank Hong Kong to develop and deliver a customized mobile banking application that takes advantage of iPhone 3G innovations reinforces our mission to help our customers leverage new growth opportunities and increase customer loyalty," said Steve Kietz, MMV's CEO, in a statement.