In Mobile Banking, It’s All About Location, Location, Location

The newswires are rife today with announcements regarding mobile banking, what with news that Google will launch a wireless payments service Thursday with Citibank and MasterCard and that the Big Three banks — Wells Fargo & Co., Bank of America, and JPMorgan Chase & Co. — have started a P2P payments service called clearXchange (which we suspect is nothing but the white-labeling of an existing P2P service).

But I’ve come to the conclusion that a key factor in the success of any of these, or the hundreds of other mobile ventures out there, will boil down to one factor: location.

Specifically, the issue is the location of the actual service on mobile devices. Let me explain, starting with the BlackBerry. When you look at a BlackBerry, where can a mobile banking service go? Generally, a mobile device has three areas of real estate: 1) the “desktop” of the phone; 2) within an application, such as an inbox; or 3) on an action menu of an application. The “desktop” is a tough place to make your mark, mainly because it is passive. The user needs to access the application in order to use it. An application, too, requires that the user go to it first. I’ve got plenty of apps on my mobile phone that I’ve download, but just don’t use. For example, I’ve got an app from Aspen Mountain in Colorado that shares ski conditions and local offers — I’m not clicking on that app much in the summertime.

But action menus are another story. It is from there that things get done, and that real estate, I would argue, is the most important of all. PayPal, for example, has seized this real estate on the BlackBerry (see image at right). Just below the email-a-contact option is “Send Money using PayPal.” This is not a marketing pitch; it is a directive, and it is a powerful one at that. The option was integrated into my inbox after I downloaded the most recent version of PayPal’s mobile app for BlackBerry. Can there also be a “Send Money using Google” and a “Send Money using clearXchange” and a “Send Money using Whatever” on the action menu list? I don’t think so. There is only so much real estate there, and for now PayPal owns it.

The iPhone is a bit different, in that its desktop is more of an “action menu,” particularly because of the touch navigation. But even the iPhone has premium real estate, and that is the immovable toolbar at the bottom of the desktop screen. Right now, most iPhone show buttons for the Safari browser, phone inbox, and iPod. Any button for banking or payments added to that toolbar would propel such a service in a way that standard app buttons on the iPhone could not.

This fight for mobile real estate is going to pale in comparison to the current fight over the revenue pie from mobile payments, in my view. Sure, mobile software companies might devise some ingenious ways to extract additional valuable real estate on mobile devices, but mobile phones almost by definition have a limited amount of real estate to go around. Put another way, the cry “location, location, location” takes on a whole new meaning in mobile banking.