Phones Become Pocket-Size Banks

By NewsFactor Network | February 16, 2007

People already use their cell phones to surf the Web, take photos and text message — besides making calls. Now, a growing number of banks are also letting them pay bills and transfer money through their cell phones.

In December, Wachovia, the nation’s fourth-largest bank, began allowing more than 4 million online-banking customers to view account information and transfer funds via cell phone.

The two largest banks, Bank of America and Citigroup, will soon unveil similar services — with the further ability to pay bills by cell phone. BofA said Tuesday that it will offer cell phone banking next month to customers in one state, Tennessee, and to other customers nationwide by midyear.

These rollouts mark the industry’s first widespread launch of cell phone banking. In the late ’90s, Bank of America and others tested the technology with a small number of consumers. But it never caught on. Banks are betting this time will be different, since most consumers now carry cell phones, many of them Web-enabled.

Some analysts agree. “It’s not a matter of if, but when, this catches on,” says Bob Egan of TowerGroup. “What the iPod did for electronic music will pale by comparison with what mobile phones will do for money transactions.”

Mark DeSario, who works in New York City for a financial services firm, says he often travels overseas and would find it convenient to be able to use his cell phone to pay bills and transfer funds among accounts.

Not everyone, though, will want to pay bills by cell phone, predicts James Van Dyke of Javelin Strategy & Research, because it’s more complex and often requires having bills on hand — unlike checking balances or transferring money.

Each bank’s system works differently. Bank of America customers must register for mobile banking before using it; Citi’s customers will need to download…

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