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.