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Details from Apple's recent patent filings suggest its mobile commerce plans are very different from the NFC payments systems touted by financial companies, and some observers are now wondering whether bankers should be more careful what they wish for.
April 22
Banks have devoted much of their mobile banking efforts to making apps for Apple Inc.'s popular iPhone, but a rival system may be more important to consumers who handle their finances by phone.
The most active mobile banking users are on phones that run Google Inc.'s Android operating system, according to a report due out today from Javelin Strategy and Research.
"Some other device just passed iPhone and we didn't even see it coming," James Van Dyke, Javelin's president and founder, said in an interview.
The first Android smart phone was released in October 2008, more than a year after the iPhone's debut and only a few months after the iPhone added its app store. And while the financial industry remains focused largely on the iPhone, banking customers are focused on Android.
But according to a March survey conducted by Javelin, Apple's grip on the mobile banking world may not be as strong as many think. Thirty-two percent of Android users surveyed said they had used mobile banking at their primary bank within the prior seven days, well ahead of the 24% iPhone users who said the same.
This trend has already been observed at USAA Federal Savings Bank.
"Android is our quickest-growing channel," Jeff Dennes, USAA's executive director of mobile, said in February.
According to data provided by USAA on Monday, Android uses accounted for 15% of the mobile banking sessions at USAA — up from 7% in January, and just surpassing the 14% that came from Research in Motion Ltd.'s BlackBerry devices.
Access from iPhone handsets made up nearly half of USAA's mobile banking sessions; that figure has remained roughly flat since January.
And there is still time for this trend to shift again. According to Javelin's data, only 8% of consumers said they used mobile banking within the prior seven days, which Van Dyke said indicates the niche can accommodate other contenders.
"It's really up in the air," he said. "There is nothing unique about the Android. … Android, if anything, is a little more difficult for a banker to integrate — there's nothing about the device itself that makes it more transaction-ready or secure."
Van Dyke said the level of mobile banking activity among Android users is most likely an indication of the type of user that each platform attracts: Apple's audience uses the device for entertainment, whereas Google's audience uses theirs for data consumption and computing, he said.
"iPhone users fit more the profile of someone who likes a variety of applications, and certainly music," Van Dyke said. "With the Android, you don't have that, so there's a lot of room among consumer behavior for something else. And here's the something else: it's logging into financial accounts."
Van Dyke cautioned that there is no reason to believe Android will remain the platform of choice for active mobile banking users; instead, the data simply shows that no one platform — certainly not the iPhone — has a firm hold on the mobile banking space.
This is not to say that bankers should ignore Android for the next big thing, but that they should keep an open mind about their customers' preferences, and to be aware that the most popular handset may not be the most popular mobile banking device, he said.
"With most technologies, you go after young people or affluent people … right now, with mobile, it's all about segmenting on the device," Van Dyke said.
Apple's role as a trendsetter in mobile has caused concern among banks, particularly because of the secretive nature of Apple's own mobile payment plans. To date, the strongest evidence of Apple's payment plans yet made public — a patent application that was published last month — indicates that Apple may be planning a mobile payment ecosystem that it can run almost entirely without the input of banks.
