Banks across the globe have only recently evolved to the shifting customer preferences to mobile and digital banking services. According to PayNXT360, 34% of consumers in the US and 42% consumers in Europe are already using mobile wallets such as PayPal, Android Pay, Masterpass, and Apple Pay. Technology firms such as PayPal and Apple Pay in the US; Ant Financial Services and Alipay in China; Paytm and MobiKwik in India are disrupting payments industry and already have registered significant user base. As a result of this, banks are running into risk of losing customers to third party platforms. Instead of competing, banks and financial institutions are collaborating with fintech firms to provide efficient and cost effective services to customers.

1. Increased competition from banks in mobile wallet
segment to drive innovation and growth globally
Analyst View Point Series

2. Table of Contents
Market Context
Key Insights

3. Market Context
Banks across the globe have only recently evolved to the shifting customer
preferences to mobile and digital banking services. According to PayNXT360, 34% of
consumers in the US and 42% consumers in Europe are already using mobile wallets
such as PayPal, Android Pay, Masterpass, and Apple Pay.
Technology firms such as PayPal and Apple Pay in the US; Ant Financial Services and
Alipay in China; Paytm and MobiKwik in India are disrupting payments industry and
already have registered significant user base. As a result of this, banks are running
into risk of losing customers to third party platforms. Instead of competing, banks and
financial institutions are collaborating with fintech firms to provide efficient and cost
effective services to customers.

4. Key Insights
Below is the list of recent developments where leading banks that have launched their
own mobile wallets or offered support to other mobile payment service providers in
order to offer digital banking services to their customers.

5. Key Insights
January 2017
France – BNP Paribas has selected Mobile Protector technology of Gemalto to secure
its multi-brand omni channel mobile wallet Wa!.
UK – Fifth Third Bank supports Android Pay and Microsoft Wallet, enabling customers
to add their debit and credit cards to Android Pay to make contactless payments with
their mobile devices.
India – SBI has partnered with government-owned telecom service provider BSNL to
launch digital wallet MobiCash. The wallet runs on Android and iOS smartphones with
GPRS facility, as well as on basic mobile phones without internet connection via SMS
or unstructured supplementary service data. The app will enable users to transfer
funds to other wallets and accounts.

6. Key Insights
December 2016
Malaysia – CIMB has launched its mobile wallet CIMB Pay for Mastercard and Visa
card holders. Apart from making contactless payments at over 1,800 NFC enabled
terminals across Malaysia, customers can also receive alerts on nearby flash deals
and offers in real-time via the app’s in built notification system.

7. Key Insights
November 2016
US – Chase Pay, the mobile wallet service from JP Morgan Chase has been launched
in November 2016. Chase Pay has partnered with merchants across different sectors
such as retail, food & beverage, and travel in order to add more customers.
Australia, Mexico, and Singapore – Citigroup has launched its own mobile wallet
called Citi Pay to allow its customers to make mobile payments for online, in-app, and
in-store transactions. Citi Pay customers can benefit from reward points and loyalty
options. Citi Pay is integrating with Masterpass to support payments for Mastercard
consumers.

8. Key Insights
Starting 2016, leading banks including BNP Paribas, JP Morgan Chase, ANZ, Wells
Fargo, Axis Bank, and Credit Suisse have begun testing blockchain technology to
execute cross-border payments, trade finance documents, and KYC registration. This
is expected to significantly reduce the time taken for manually processing
transactions, in addition to securing error-free operations.
At a fintech forum in Japan in February 2017, Bank of Japan’s executive director
Shigehiro Kuwabara advised that financial institutions should avoid depending on
technology firms for distributed ledger technology. Kuwabara cautioned that though
the distributed ledger technology has great potential, but it however cannot completely
reinstate the current banking systems.

9. Key Insights
Kuwabara noted that banks need to understand about the technology so as to offer
enhanced banking experience to customers. Bank of Japan is collaborating with the
European Central Bank to explore opportunities using the distributed ledger
technology.
However, there is a different view point in India where the Indian central bank Reserve
Bank of India’s deputy governor suggests banks to extend cooperation with fintech
firms in the areas of peer-to-peer lending.

10. To Know More
To know more about how these developments are
likely to impact mobile payment growth, click here.