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Will Americans ever call on mobile banking?

Carriers and financial institutions keep announcing mobile-banking and payment services, but so far, U.S. adoption is being dwarfed by that of developing nations, where it's more useful.

More cell phone operators and financial companies are jumping on the mobile financial-service bandwagon, but it remains to be seen if U.S. cell phone subscribers are even interested.

Sprint Nextel announced on Thursday that it will be the latest U.S. wireless carrier to offer its mobile-phone customers the ability to bank from their mobile handsets. The new MyMoneyManager service is a free downloadable application that enables cell phone subscribers to check bank balances, pay bills, and find nearby branches or ATMs from their handsets.

Sprint has initially partnered with four banks, BB&T, Citibank, IBC Bank, and PNC Bank, to provide the application. It plans to add other banks at a future date. And it will eventually bundle the application into some of its handsets.

Credit card giant Visa also announced several mobile initiatives Thursday. Specifically, it plans to enable its customers to transfer money, make payments, and receive real-time account notification alerts on their Nokia phones, as well as cell phones using the Google Android operating system. Visa also struck a mobile deal with U.S. Bank that will enable individuals to make money transfers from one Visa cardholder's account to another.

Initiatives to make bill payments and other banking tasks phone-friendly have been hyped over the past couple of years. Mobile banking is one of several new mobile services, such as music downloading and TV viewing, that have been enabled by faster 3G wireless networks.

And for the past couple of years, financial institutions and cell phone operators have been rolling out new services and applications.

Most banks participating
Most of the major U.S. banks already offer some kind of mobile-banking technology, according to market research firm Celent. And the two largest mobile operators in the States have also introduced mobile-payment and banking options.

AT&T launched a mobile-payment application made available through Firethorn, which has since been acquired by Qualcomm, in March 2007. The telecommunications giant has also been running trials with Nokia to turn cell phones into debit cards, allowing people to make purchases with their cell phones. And Verizon Wireless, which also uses Firethorn, launched its mobile-banking application in January 2008.

But despite the fact that there are many options and opportunities for cell phone subscribers to access their banking information and pay their bills on their mobile phones, the uptake for these applications and services has been pretty weak. According to Forrester Research, only about 3 percent of mobile subscribers in North America check financial accounts on their mobile phone at least once a month. This rate of adoption is lower than that of services like music downloading, which 5 percent of mobile users say they do at least once monthly.

"Mobile banking and bill payment has been available for a while now," said Charles Golvin, a senior analyst at Forrester Research. "But it has yet to set the world on fire."

With more than 85 percent of the U.S. population owning a cell phone and more than 47 million people banking online, it would seem like a natural fit for Americans to migrate to mobile banking. But the reality is that getting people to use their handsets for doing more than making phone calls hasn't been easy.

Even though mobile operators have seen revenue for data services go up recently, only 11 percent of cell phone users access the mobile Web at least once a month, according to Forrester Research. Only 5 percent of mobile users download music onto their cell phone at least once a month, and only 3 percent watch mobile videos on their phone.

Not a huge shock
So it's not a huge shock that so few mobile subscribers are banking from their phones. One of the major hurdles for mobile banking has been that most of the services have either required users to download an application onto their phones or to use a mobile browser to navigate to a Web site formatted for a cell phone screen.

Other than owners of the Apple iPhone, most mobile-phone users do not like downloading applications, Golvin said. But even if an application is preloaded on a phone, there is no guarantee that it will be used. And for carrier-specific applications, mobile operators have to strike deals with individual banking institutions.

"Nobody is going to switch their cell phone provider because that provider has a mobile-banking deal with their bank," Golvin said. "And vice versa, no one is going to switch their bank because their cell phone provider offers mobile banking. It's just not a top priority."

Besides the convenience factor, another reason mobile banking hasn't take off is that there are few compelling reasons to access bank or bill-paying information on a mobile phone when most people in the U.S. have easy access to a computer. With overdraft protection, automatic bill paying, and convenient and easy access to ATM cash machines, most people don't need up-to-the minute check balance information, nor do they need to be able to pay bills while walking around town.

But that's not to say that there aren't some situations in which mobile banking would be useful. The service could be helpful for people who are traveling. Users also may appreciate getting text alerts that certain bills are due or that the overdraft protection has been accessed.

"Banking has been a compelling application for consumers on the PC," Golvin said. "But like any other Web application, it needs to find its own value proposition in the mobile world. Not everything that is popular on PCs will make it to cell phones."

Fertile soil in foreign lands
That said, experts see mobile banking and other mobile financial services taking off outside the United States, where access to communications infrastructure and banks is limited.

There is a lot of opportunity for mobile financial services in the developing world, where more people are likely to have access to cell phones than they are to computers. What's more, people in the developing world have less access to banks and money machines. And many of the vendors in other countries don't accept credit cards or debit cards. Cell phones could end up being an important way to expand financial services for people in these regions of the world.

Some services have already seen big success. For example, Globe Telecom in the Philippines offers Gcash, a service that enables people to use their phones to pay for things and transfer funds. Mobile operator Safaricom has been offering its M-Pesa service to subscribers in Kenya to provide money transfers. And MTN, a mobile carrier in South Africa, has also been offering a mobile-banking solution.

"My prediction is that mobile banking will steadily grow in the U.S. and become just another channel that banks will offer," said Red Gillen, a senior analyst at Celent. "But outside the U.S., especially in emerging markets, mobile payments and mobile banking make a lot of sense. And that is where I see it being most useful."