Quantcast
Debit

Mintel: Banks Should Tap Mobile And PFM Products, Not Debit, For New Revenues

Print
Email
Reprints
Twitter
LinkedIn
Facebook
Google+
Partner Insights

Banks trying to make up for lost revenue should consider adding fees for new products and services such as mobile banking or payments, rather than charging customers for using debit, market-research experts at Mintel Comperemedia advise.

And a crucial question banks must ask themselves is whether they want to make revenue from the few customers who are willing to pay more for certain services or risk turning off the vast majority of their product-users.

A recent Mintel survey of 1,000 U.S. adults suggested that 80% of consumers will not tolerate a monthly debit card fee and 56% said they would use another form of payment instead.

 “It’s really difficult to charge for things that have always been free,” Susan Wolfe, vice president of financial services at Mintel, tells PaymentsSource, alluding the the public relations catastrophe surrounding Bank of America Corp.’s unsuccessful attempt to introduce a $5 monthly debit fee (see story).

“I understand Bank of America’s goal of trying to keep costs transparent but clearly that effort backfired.”

Banks instead need to look to new products and services to generate new revenue, such as U.S. Bancorp’s practice of charging 50 cents for each remotely deposited check using a smart phone, says Wolfe. She notes that with such new services, consumers may pay for the convenience and get used to paying those fees.

When banks wanted consumers to begin using mobile banking services starting in the 1990s, they had to stop charging fees for it. “Banks need to balance here: do we want our customers to use this tool because it’s in our best interest to do banking this way or do we want to have fewer customers who use and generate fee-revenue,” says Wolfe.

She suggests that mobile banking and payments, which are still in their infancy for the most part, may offer another potential opportunity generate fees and revenue.

 Products that cater to personal financial management, which aggregate banking products and provide a service to customers, also might also be something banks can use to generate fees consumers might accept because it is offering convenience.

What do you think about this? Send us your feedback. Click Here.

 

 

 

 

 

 

 

SEE MORE IN

Email Newsletters

Get the Payments Update and the Morning Scan when you sign up for a free trial.

Already a subscriber? Log in here
Please note you must now log in with your email address and password.