Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

• Online Payments Shifting from Debit to Credit Cards, Report Finds

American Banker

Assuming new Federal Reserve Board rules regulating debit card interchange stand, total U.S. consumer payments volume from online use of credit cards will climb 63% during the five-year period from 2011 to 2016, while debit card online-payment volume will rise by just 2%, according to Javelin Strategy & Research’s latest Online Retail Payments Forecast report. “After several years of declining use, credit cards are poised for resurgence,” Beth Robertson, Javelin director of payments research, said in a Nov. 28 press release. “Despite the nation’s very rocky economic recovery, consumers appear to have halted their belt-tightening, and bank incentives to use credit cards rather than debit are gaining appeal.” Javelin predicts a 16% increase from last year in the U.S. online market as retail e-commerce sales rise to $309 billion in 2011 and to $444 billion by 2016.

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• Yodlee Taps Open Solutions for FinApp Partner

Credit Union Times

Yodlee Inc. said Open Solutions Inc. of Glastonbury, Conn., will be the California company’s first channel partner to offer its customizable personal financial management platform and app store for institutions. The Yodlee Platform with FinApp Center includes a consumer-driven marketplace for personalized financial applications. Yodlee said it certifies each FinApp so financial institutions can choose and present secure, personalized functionality through their own websites, the company said. The FinApp center will be integrated into Open Solutions’ DNAweb online banking system, the companies said.

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• Alt Marketing: Bank of America Helps Feeding America on Cyber Monday

NetBanker

Yesterday, NetBanker looked at several financial institutions using Black Friday/Cyber Monday to promote banking products. But it’s also a great time to focus on community outreach and charitable pursuits, a tack taken by Bank of America.  The bank is supporting Feeding America, which leverages a small amount of cash, into a large number of meals by tapping bulk food donors. It says that every dollar donated translates into 8 meals. Bank of America’s is providing $1 million outright plus an additional $500,000 pledged in matching funds.

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• Banking by smartphone catches on, will increase

Pantagraph.com

With telephones now serving as de facto personal computers for many, financial institutions are rapidly jumping on the mobile banking bandwagon. “It’s exploding the way Internet banking exploded a few years ago,” said Debbie Jemison, a spokeswoman for the Illinois Bankers Association. A 2010 survey showed that, while just 27 percent of banks in Illinois offered mobile banking, 89 percent of the others were looking to add it in the near future. Banking via smartphone is also an aspect of finance that PNC Bank’s Area Regional Manager Jason Pals did not see coming when he entered the industry in 2000. “Of course no one was using mobile banking, but estimates are 40 percent we’ll be using it by next year,” said Pals.

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• Banks scrambling to serve tablet users

Reuters

With the success of Amazon’s new Kindle Fire tablet on the heels of Apple’s pioneering iPad, the growing number of tablet users like Davis who want to do their banking on the device are likely to notice something lacking in the experience. Of the nation’s biggest banks, only 30 percent offer a tablet-specific app, says Mary Monahan, the head of mobile devices research at Javelin Research & Strategies. And that’s just for iPad users. So far, none of the banks have a specific application for iPad’s Android-based competitors that are gobbling up market share, including Kindle Fire. “We’re seeing the opportunity coming alive right before our eyes,” says John Flora, director of product management for mobile for Intuit Financial Services

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• Banks Stumble Along Tech Frontier

Wall Street Journal

In September, Google Inc. introduced phones that are embedded with a chip that allows consumers to make payments by tapping their phones against a device at the cash register. Visa Inc. and MasterCard Inc. are backing the technology, and merchants such as American Eagle Outfitters Inc., Jack in the Box Inc. and Macy’s Inc. are accepting the payment method. For mobile payments to take off, “something has to be in it for the consumer and something has to be in it for the merchant,” said Paul Galant, chief executive of Citigroup’s Global Enterprise Payments group, which designs payment solutions for consumers, corporations and governments. The banking industry, led by J.P. Morgan Chase & Co., flooded customer mailboxes with new cards that cost $2 to produce, compared with 20 cents for a traditional card with a magnetic strip.

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Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

• Consumer Groups Urge CFPB to Impose Greater Protections for Prepaid Cards

American Banker

Consumer advocates are calling on the Consumer Financial Protection Bureau to provide greater protections for prepaid debit card accounts. A letter released Friday signed by seven consumer advocacy groups asked the bureau to clarify that the definition of “account” under Regulation E includes the pooled accounts into which funds accessed by prepaid cards are placed. The groups, including Consumers Union, Center for Public Policy Priorities, Center for Responsible Lending, Coalition of Religious Communities, National Consumer Law Center, SC Appleseed Legal Justice Center and U.S. PIRG, said the clarification is essential to ensure prepaid card users have full consumer protections under the Electronic Fund Transfer Act.

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• Google Folding Checkout Service to Fuel Mobile Wallet

American Banker

Like a pop star who sells more records posthumously, the Google Checkout payment service may prove most beneficial to Google after it is phased out. Google’s mobile wallet is about to absorb the user base of Checkout, the search giant’s underwhelming answer to PayPal. Both the online and mobile payment services will be called Google Wallet. By folding Checkout — which is used by 9% of consumers, according to Javelin Strategy and Research — into Google Wallet, Google could catapult the latter well ahead of many competitors in mobile payments.

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• Mobile Love: The Smart Phone Becomes the Apple of Members’ Eyes

Credit Union Journal

People love their smart phones — almost literally — which is helping to make mobile banking a big hit at Apple Federal and Eastman credit unions. Eastman got marketing help from Intuit Financial Services (IFS), the financial management solutions company that provides Eastman and Apple Federal with text, mobile web and application banking. The “Tap, Snap, Deposit” campaign from IFS demonstrated “how easy mobile deposit is,” Lounds said. Credit unions need to make sure to provide members with an appropriate mobile banking solution, suggested John Flora, group product manager at IFS.

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• Insights From Four Banks In Using Social Media

Credit Union Journal

There is one universal truth when it comes to social media, and conveniently, it can be expressed in fewer than 140 characters: Everyone thinks everyone else has it figured out. Credit unions tend to believe other credit unions do a better job leveraging social media than they do, and all fear that banks have deeper resources and dedicated personnel and are leaving them in the techno-dust. Banks fear every other bank (just as a matter of principal and habit, more than anything else), and believe it’s credit unions that are the more effective social media strategists, given a closer relationship to their members.

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• Mobile Banking: Just Another Channel Or Fundamental Strategic Shift?

Forrester Blog

In the past week Benjamin Ensor had the privilege of talking to (or listening to) executives responsible for mobile banking at some of Europe’s biggest banks, including Bankinter, Barclays Bank, La Caixa, Lloyds TSB, Nordea and RBS, at Forrester’s Marketing & Strategy Forum and at a conference on Next Generation Mobile Banking hosted by The Banker. I have also spoken privately to many other executives over the past few months, including at Forrester’s eBusiness Council meeting this week. Simplistically, their view of mobile banking falls into two camps: Mobile is just another channel. These executives see mobile banking as a way of letting customers do old things, like checking their account balance, in new ways. Mobile will revolutionize retail banking.

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• Convergence of Carrier and Payment Company for the Un- and Underbanked

Javelin Strategy & Research Blog

Last year, in Javelin’s underbanked report, we wrote that the carrier’s mobile transfer infrastructure will eventually converge with the existing mobile banking and payments infrastructure. Visa’s announcement today with MTN, building on their acquisition of Fundamo, is a sign of that convergence.  Visa has introduced a prepaid account that will be offered through the MTN Group to its customers in Nigeria and Uganda. MTN services are currently available in 21 countries, centered in Africa and the Middle East.

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• Visa to Offer Mobile Payments in Developing Nations

New York Times Blog

Visa has been hard at work on a mobile digital wallet that it hopes to roll out early next year. But that’s not the only mobile market the credit card company has its eye on. On Wednesday, the company announced plans for a product aimed at letting cellphone users in less developed nations buy goods and pay bills using their phones. “It won’t require a physical card attached to the account,” said John Partridge, president of Visa. “It’s a virtual prepaid account designed specifically for the mobile market in the developing world.”

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Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

• Financial Roundtable Issues Advice for Banks on Social Media Risk

American Banker

Years after social networking sites became mainstream, banks are still trying to figure out the best ways to use them – and in particular, how to manage the risk and compliance issues connected to sites such as LinkedIn, Twitter and Facebook. BITS, the tech arm of the Financial Services Roundtable, this week issued a white paper attempting to provide an assessment of the various risks, as well as some mitigation strategies. BITS placed a particular focus on making customers aware of the fact that privacy rules of social networking sites don’t match those of most banks. It suggested that banks take steps to carefully vet the data aggregation that will take place if social media sites eventually merge.

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• Isis Network Deals Pave the Way for Banks

American Banker

Isis, the wireless carrier-led mobile payments venture, just crossed off an integral item on its to-do list in signing Visa Inc., American Express Co. and MasterCard Inc. Isis executives said Tuesday that its contractual agreements with the three networks will allow consumers to load their networks’ payment cards into a mobile wallet application scheduled for field trials next year. Specifically, Isis is licensing the networks’ contactless payments specifications for use in its software. Isis initially had a relationship with Discover Financial Services as its only card network. The deals with the other card brands “effectively lay the framework for any of the networks to get their cards, their payment applications, into the mobile wallet,” Jaymee Johnson, the head of marketing for Isis, said in an interview on Tuesday.

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• It’s Nifty To Be Thrifty, As App Demonstrates

Credit Union Journal

Saving money? Yeah, there’s an app for that-or at least there’s a blueprint for one. “Squirrel,” a project from Verity CU SVP/CMO Shari Storm, was recently named as the runner-up for the first annual COOP THINK Prize at CO-OP Financial Services’ annual THINK Conference. “Squirrel” was conceived as a smart phone app that lets users squirrel away money by diverting funds they would have spent on discretionary items into a savings account. “Credit unions have always promoted thrift,” noted Storm. “We’ve had Christmas clubs for decades, and this is the same concept, really.”

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• Making Customers Comfortable With Merchant-Funded Rewards Programs

Javelin Strategy & Research Blog

As new merchant-oriented rewards programs like Groupon and LivingSocial have become increasingly popular with consumers, banks have also begun to introduce merchant-funded rewards that can offer consumers a more targeted rewards experience than these e-mail discount services are able to offer. The bank-focused services, detailed in Javelin’s recent report – Evolving Rewards Strategies: How Merchant‐Funded Programs Will Usher in a New Era of Loyalty for FIs – enable precise targeting through analysis of anonymized transaction data. The beauty of the targeted merchant-funded rewards programs described is that neither the bank nor any other party knows the consumer’s particular interests.

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• Consumers fear mobile banking but they shouldn’t

MarketWatch

More consumers are buying smartphones, but they’re not embracing mobile banking at the same pace — mostly because they have a misplaced fear of it, according to a survey released Tuesday. “Mobile banking is the next greatest thing in technology, but the surprising thing is that in spite of the powerful growth of the smartphone, the growth in those who did online banking hardly changed at all,” said Phil Blank, managing director of risk, fraud and security for Javelin Strategy and Research, which compared data from three different surveys taken since 2010. From 2009 to 2010, Javelin tracked a 60% surge in the number of smartphone users.

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• Consumers Hold Back, Hurting Profit at Bank of America and Wells Fargo

New York Times

Even as the big banks stanch their losses, they are reckoning with an unfortunate reality: the anemic recovery is hurting their results. Second-quarter numbers on Tuesday from the nation’s two biggest consumer lenders, Bank of America and Wells Fargo, showed the toll the sluggish economy was taking on revenue growth. As Americans increasingly dig out of debt, lenders’ income is being reduced by a fall-off in mortgages, credit card and other types of consumer loans. Bank of America reported an $8.8 billion loss, after taking a $20 billion hit to clean up a raft of mortgage problems.

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