How important is mobile payments for the U.S.’s biggest issuers?
Pretty important – despite the media’s interest in discussing whether they should be broken up.
Bank of America
For instance, Bank of America gave insight into its mobile transactions growth with one app the mobile payment industry has had under a microscope since last fall: Apple Pay.
Although Apple hasn’t released specific figures on how many consumers actually use its mobile wallet, Bank of America shared some stats on how many of its cards are in Apple Pay wallets.
“Since the introduction of Apple Pay in October (of 2014), nearly 800,000 [Bank of America] customers have enrolled in the service, adding approximately 1.1 million cards,” the company wrote.
Bank of America has roughly 50 million credit cards in circulation and is said to have added 1.2 million new credit cards in the bank’s fourth quarter. Every bank has their own unique spin on how to market Apple Pay, but Bank of America aligned its focus as the same perk mobile banking has: “Shop on-the-go with Apple Pay.”
Bank of America’s number of new credit cards in the fourth quarter of 2014 was a 19-percent increase from the 1 million cards issued in the same quarter a year prior. They say that roughly 67 percent of those cards went to existing relationship customers. Bank of America made a clear statement by announcing its mobile transaction numbers that it’s continuing to push Apple Pay to its customers. Not surprising – since an increase in Bank of America Apple Pay users means the possibility that well-heeled iPhone 6 customers will use Apple Pay with those Bank of America cards. Top of wallet is every issuer’s goal.
While it appears its customers are warming up to Apple Pay, Bank of America still focused the majority of its report on the number of mobile banking customers, which increased in Q4 to 16.5 million users (a 15 percent increase from a year prior). Mobile transaction deposits are also up, rising from 9 to 12 percent in a year’s time.
While Bank of America focused on its Apple Pay strategy of “shop on the go,” Citi kept its motto closer to the core of its banking feature (aka that credit card that’s in that wallet) with its tagline “an out-of-wallet experience.” Citi, of course, was an early adopter of mobile wallets, holding the first exclusive deal with Google Wallet through its Citi MasterCard in 2012.
While there wasn’t much mention about mobile payments figures during Citibank’s earnings call with analysts Jan. 15, nor in its financial release, it was reported that Citi is buying IBM’s new mainframe to help boost its mobile and online transaction capabilities – and, hopefully, volume. “[Mobile] is causing us to see a different blend of transaction mix and volume, and it’s causing us to look at how we deliver that elegant, seamless experience to the customer in a very scalable and secure way,” said Martin Kennedy, managing director for global enterprise platforms and storage at Citi.
These mainframes, as advertised, are capable of “processing 2.5 billion transactions a day, encrypt mobile and online banking transactions, and allow those transactions to be monitored with real-time analytics, allowing users to spot potential fraud and find opportunities within transactions as they’re happening.”
Citi has roughly 52 million Citi-branded credit cards in circulation.
Although JPMorgan Chase was one of the early supporters of Apple Pay, it hasn’t shared any figures publicly about how many customers are using Apple Pay. In its Q3 earnings last October, the bank announced it was working on creating its own mobile payment app. But in its Q4 earnings report there was no word of Chase Pay. While JPMorgan Chase has been one of Apple Pay’s most vocal visible backers, it has been aggressively working on plans to hedge its Apple Pay bets by readying its own mobile payment app for launch that can work across all mobile operating systems.
“We think that we can also be friendly to merchants with data, with pricing, with simplified contracts. So we are trying to make this an ecosystem that works better for everybody and is far more secure. I have customers on both sides and I’m far more secure,” CEO Jamie Dimon said Oct. 14.
Digital is clearly a big focus for JPMC. In its Q4 earnings, it reported that its active online customers hit 36.4 million, which includes active 19.1 mobile customers, which was up 22 percent from the year prior.
Chase has roughly 64 million credit cards in circulation.