DETROIT – Cingular Wireless is planning to launch a mobile-phone banking service that allows users to check account balances, transfer money and pay bills on their cell phones the same way they do now on their computers.
The new mobile service is set to be available on Cingular handsets early next year as part of a deal between the carrier and Firethorn Holdings LLC, a closely held company that specializes in mobile banking, the Wall Street Journal reported.
Mobile banking is one of many new features Cingular, a joint venture of AT&T Inc. and BellSouth Corp., is rolling out to attract customers and increase sales to offset declining revenue from traditional calling plans. While wireless banking has already taken off in Europe and Asia, Cingular’s offer marks one of the service’s first beachheads in the U.S.
Online banking, of course, already is popular among bank customers who use personal computers to transfer funds, make payments and check balances. Close to 45 percent of Internet users banked online in 2005, up from less than 15 percent in 1998, according to a recent survey by the Pew Internet and American Life Project.
Wireless banking opens up a range of new possibilities. For example, vacationers on the road would be able to pay bills they forgot to handle before they left home. Or a user of the service could check his or her bank balance for sufficient funds before writing a check.
But for wireless banking to catch on, banks have to participate. Cingular’s service works only if a user’s bank makes it available for downloading off its Web site. At this point, Cingular says it is in talks with a number of banks but so far hasn’t announced any deals. Financial institutions have an incentive to offer the service because of the additional flexibility it would give their customers, according to Firethorn executives.
Banks must be able to assure customers funds and account information are safe. Firethorn says it designs its systems with an intricate password and identification setup so the systems can’t be hacked and are as secure as online banking services.
Cingular says the wireless banking service will work on most of its handsets. Subscribers who have accounts at participating banks will be able to download the application from their banks’ Web sites. Afterward, subscribers will be able to do mobile banking similar to the way they do online banking from their PCs.
Cingular will charge users of the new service only for the bandwidth they consume when they perform banking operations. It isn’t yet clear whether banks also will charge fees for downloading the application or using the service.
Cingular is the first U.S. carrier to use Firethorn’s mobile banking system, but Firethorn says it expects to do deals with other operators in the future.
