Monday, February 7, 2011
By Michael Scheibach, Executive Editor
If you've attended any banking conferences over the last couple of years, you've undoubtedly heard that telecom service providers (e.g., Verizon, Sprint, AT&T) loom as the biggest potential threat to traditional banking in the payments arena.
Well, listen to this:
Ericsson, which calls itself the world's biggest mobile telecom equipment maker, is launching mobile banking services - primarily money transfers. Although focusing on Europe first, the company has global aspirations. Estimated revenues in Europe from financial services over the mobile channel are $27.7 billion by 2015 - a significant sum of money.
According to a company press release, the mobile banking service "will be a rival to traditional money transfer operators like Western Union and MoneyGram initially, but could replace credit cards in the future." Ericsson said mobile payments and person-to-person money transfers are likely to become some of the most-used mobile applications in the next two or three years. And I think we'd all agree on this.
Here is the heart of the story, though. Ericsson is partnering with a bank for its European service; however, it's long-range global strategy is to sell the service to telecoms around the world and connect them in what it calls a "cross-border system."
A Brave New World is coming.