If banks really do want to resuscitate personal mobile banking – and they’re spending huge sums doing so – they should look to the internet-based web service to prevent customer angst at the sky-high mobile phone charges. By Chris Skinner.

Iam struck by the sheer number of announcements of late relating to mobile payments and mobile banking. Nothing wrong with this but times change fast and I am wondering how long mobile will be in vogue

This is because technology is virtually obsolete the day you buy it. Just look around and DVD players are disappearing with on-demand internet TV, while the iPod has become the iPhone has become the iEverything.

The mobile phone is actually dead as a dodo just as you start investing in it heavily. All those mobile telephone firms are going to be zapped by internet communications and all those expensive 3G licences will soon not be worth a jot.

This is obvious for those of us who travel worldwide, like myself, as I am getting increasingly angry with the charges when making calls home.

First, the mobile firms lock you into what they advertise as a cheap-rate ‘passport’, which means I pay more than double the cost of calls thanks to the connection fee. Then I am charged a huge £1.50 ($3) a minute when calling home from outside Europe. That is hugely expensive.

Investing big time

So why am I writing about this in a banking journal? Because banks have finally woken up to mobile banking and are investing big time, even though there are serious questions about whether customers will use or pay for it.

For example, I recently spoke to a developer at a major US bank and he said they are “currently in the pilot phase for the mobile personal banking rollout and it is the bank’s second rollout of personal mobile banking”.

This was the first major US bank to offer such services more than a decade ago but cancelled the program back then because of “lack of interest”. Today, the developer reports, the bank’s staff do not think they will use it often either. As he says: “If the bank isn’t convinced, how the hell will the customers be?”

But this is not where I am coming from when I say mobile is dead. Mobile is in a transient state and will soon converge with the internet. It is already happening where I use my Nokia phone to surf. So here is the rub. Due to the high overseas call rates, I now make most of my calls using Skype. These are about a penny a minute, compared to £1.50. I cannot see how any firm can expect to compete in the future by charging 150 times more than the new competition.

If I were you, banking strategists, I would not bet the farm on mobile banking. I would bet it on the internet-based web service instead.

Chris Skinner is an independent financial commentator (www.balatroltd.com).


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