Mobile banking services taking off


Banks are starting to
allow customers to make
transactions by cell phone.

SAN FRANCISCO CHRONICLE

Noah Richardson was shopping for a suitcase last week when he faced a familiar question: Do I have enough money in my checking account to use my debit card?

In the past, he would have paid for it with the card and raced home to find out if he was overdrawn or needed to add more money to his account. But this time, he pulled out his cell phone, visited the Wells Fargo mobile site and within seconds, he knew exactly where his account stood.

“I was pretty sure I had the money in the account but I didn’t know if the bills had cleared,” said Richardson, a 32-year-old San Francisco software designer who shares his checking account with his wife. “I was out and about but I was able to check if I had enough money to be able to use my check card ... I felt more secure because I was on top of the situation.”

It’s all part of the world of mobile banking. Wells Fargo is the latest bank to add mobile service, following Citibank, Bank of America, Wachovia and SunTrust, all of which started similar services in the past few months. Most of the country’s top 20 banks are either offering the service or trying it out.

Mobile banking

The mobile services, all free, allow customers to check balances, see recent transactions, move money between accounts and pay bills. Many also offer a way to find the nearest ATM or bank branch.

The jump to mobile banking gives customers more convenience and adds another function to the evolving cell phone, which has moved well beyond making phone calls. The service is a step toward turning the cell phone into an “e-wallet,” allowing people to pay for things with it.

“We think this is an emerging need that strengthens our relationship with our customers,” said Jim Smith, executive vice president and managing head of Wells Fargo Internet Services Group. “Over the last four to five years, we’ve seen an incredible revolution in mobile devices and customers’ willingness to try out new things. We felt that devices have reached a point that with customer acceptance of advanced features, this is a viable feature for customers.”

How it works

The services work in three ways. Customers can visit a bank’s mobile Web site through their cell phone browser, logging in as they would for online banking. Users have to pay data charges to their carrier or buy an unlimited data plan. Bank of America and Wells Fargo both employ this model.

Citibank offers a downloadable application that can be loaded on to more than 100 phones and will soon come preloaded on some phones. Having the application loaded on the phone enables quicker viewing and requires fewer data charges.

The final model is being used by Bank of Stockton, which enables banking through text messaging. After verifying their account, users can check balances, pay bills and receive electronic bill alerts via text messages.

Institutions like Citibank employ a combination of services, and it’s expected that more banks will offer additional ways to access your account from your phone.

Banks say the service will initially appeal to younger customers who often carry lower balances and want to know how much they have in their accounts.

A wider audience

But they say the service can also find acceptance with a wider audience of people who just want the freedom to manage their finances from anywhere.

“If you’re standing in line and you wonder should you use your debit or credit card, in 10 seconds you can know balance,” said Steve Kietz, business manager for e-commerce at Citibank.

“If you want to do a real-time transfer, you can do it. It’s a great way for people to manage their money and use their debit card without any risk.”

It’s too early to gauge the success of mobile banking services, though officials say they have generally exceeded expectations.

To be successful, analysts said, people will need to be made aware of mobile banking and convinced of its safety.

“Security is a huge perception issue,” said George Tubin, an analyst with the Tower Group. “You’re standing out in the wilderness with an untethered device, communicating out in space. People are concerned who will get the message.”

The banks use some of the same 128-bit encryption and security they use on their online banking sites to protect user information. Many are also extending their standard online guarantee for mobile users, assuring them they will not be liable for problems with their account.

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