Perspective: Banks Not Positioned to Deliver Mobile Payments' Core Functions
This IDC Financial Insights Perspective examines the options facing retail consumer banks and other mobile payment participants in establishing their role in the evolving mobile payment arena. A key decision banks must make is whether they are going to continue building their own proprietary mobile payment infrastructure or incorporate core payment solutions like Apple Pay and Android Pay into their mobile payment offerings.It has become clear that Apple and Google, with their control of the mobile phone operating systems (OSs) market, will be the ultimate winners in the provision of core mobile payments services, with banks facing a losing battle in their attempt to build competing individual core payment solutions. By core we mean the near-field communication (NFC) interface, host card emulation (HCE) code, subscriber identification module (SIM) card provisioning, activating payment cards on mobile devices, transaction tokenization, loyalty card integration, merchant system setup, and cloud services.Banks need to focus on providing elegant client service and product features for the critical mobile banking domain to ensure client loyalty. Included in the mobile banking offerings will be simple access to mobile payment services through application programming interface (API) links to third-party providers of core mobile payment services.
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