Wireless Banking Gaining Steam

LAS VEGAS—Some of the largest companies in the world are betting that consumers will want to check their bank balances and even make payments using their mobile handsets.

Wireless technology vendor Qualcomm announced a partnership with Citi allowing customers of the financial services firm to check their account balances, credit limits on their cards and view recent transactions.

The service is expected to be available to Citi credit card customers by the third quarter of this year.

AT&T is the telecommunications partner to Firethorn and Citi.

Raja Rajamanner, executive vice president of Citi Cards, said the company is also using wireless technology from Qualcomm subsidiary Firethorn in pilots to test the viability of using cell phones for person-to-person payments.

Qualcomm executive vice president Len Lauer said the company and its partners envision cell phones being used to enable mobile coupons, loyalty cards, as well as payments to merchants using near-field transmission.

"We see a large opportunity for growth in mobile commerce," said Lauer at a press conference here. He added that Qualcomm sees the opportunity to take the contents of a normal wallet "and digitize it into the mobile phone."

Separately, Citibank announced that it will test a person-to-person mobile payment system from Obopay for its retail banking customers.

Starting during the summer of 2008, Citibank customers will be able to receive and send money from their mobile phone directly into or out of their Citibank checking account. Customers will be able to enroll in the mobile payment service through Citibank.com or in Citibank branches in select markets.

However, analysts warned that there remain substantial hurdles before mobile banking becomes truly ubiquitous. Telecom carriers will have to make significant investments in infrastructure, and consumers have to be convinced to use the services.

Phil Asmundson, who follows the wireless market for consulting firm Deloitte, noted that the telecom industry will have to make some $100 billion in investments by 2015 in order to meet the demand these new services will put on the existing infrastructure.

Tole Hart, an analyst with Gartner, noted that carriers will want to get their piece of the action in return. "They won't want to be just a pass-through," Hart said.

He also said customers will have to be persuaded of the value of near-field payment services by offering them what is more convenient than using conventional wallets. "There's got to be a convincing case for it," he said.

He suggested that paying for refreshments at sporting events is one use-case that would resonate with consumers.