The research says it over and over: Banks should move quickly to adopt or develop new payments technology, but it leaves banks with a very long 'to do' list.

That list includes mobile wallets, person-to-person payments, faster payments initiatives, building small-business loan programs and increasing online, mobile banking and business-to-business channels.

But many banks haven't moved ahead on any of these issues, in a textbook case of information overload and paralysis from analysis. Or, the payments industry is simply in a phase that famous early 1900s economist Joseph Schumpeter called "creative destruction" to describe ongoing innovation common in capitalism, said Steve Kenneally, vice president at the American Bankers Association.

"There is no one silver bullet to faster payments or mobile wallets or P2P and we are in that phase where there are a lot of good and competitive players out there trying to gain market share," Kenneally said.

Under those circumstances, banks will tread carefully to make sure they select the right products and partners, Kenneally said.

"It looks messy and doesn't look very organized, but I guess that is what capitalism is, a fight until there is a clear winner," Kenneally added.

Even though banks and merchant clients might be slow to adopt specific payments technologies, they can move faster on certain aspects of customer service related to new technology.

It's an "enduring mystery" as to why many decisionmakers in the payments industry haven't moved quickly to embrace new technology as a way to further customer loyalty, said Greg Weed, director of card research in the final services division of Phoenix Marketing International.

There have been many instances in which Phoenix Marketing has delivered important trend reports in writing or in person, only to get little reaction from industry clients, Weed said.

"It's almost as if it is too much [for banks] to deal with sometimes," Weed said. "The banks and retailers are setting up mobile wallet task forces and steering committees, while at the same time getting bombarded with information from the left and right."

At the very least, issuing banks should be sending acknowledgement letters to thank customers for signing up for a mobile wallet service associated with their bank, Weed said.

"Research has been clear that consumers are wandering around with mobile wallets on their phones, but not sure where they are accepted or what the benefit of the wallet is to them," Weed added.

It should be easy for a bank to send a letter so the customer knows the bank is aware of the wallet registration, and maybe give them a reward for using it, Weed said.

Otherwise, registering for a mobile wallet comes across as "kind of a mess" and adds to a general uncertainty banks have about how to approach the new age of payments and security technology, Weed added. "Banks don't want to end up doing something wrong or embracing a technology that doesn't deliver a decent return on the investment."

Aside from what industry research tells banks, the real motivation for issuers and acquirers should be to establish a defense, Weed said. "They know they have to do this. It's like a 'no issuer left behind' credo."

Banks haven't fully shaken the recent recession years, leaving them in a mode in which they view services such as small-business loans as too risky. It has left the door open for nonbanks like Square and PayPal to approach small merchants with capital loans and the potential to secure those merchants for other services.

Companies like Intuit with OnDeck, or Kabbage and Fundation have proven to approve loans faster than banks do, though banks may still offer better pricing.

As such, some banks are starting to realize they can partner with other service providers and try to keep their customers happy, said Michael Moeser, director of payment at Javelin. Many have chosen to white-label OnDeck and similar services to offer loans to small businesses through the bank's brand, Moeser added.

Banks need an open mind about potential partnerships because they need to stay in the forefront of technological change, Moeser said.

"Banks have a traditional place in a lot of people's minds as where they get loans and write their checks, but the reality is that consumers are using social media to send money and using online and mobile for banking," Moeser added. "We are seeing traditional things falling off to the wayside, and taking a slow approach [to make decisions] is not serving the banks as well."

In addition, financial institutions and retailers alike don't want to get too far behind the trend of Buy Buttons appearing online or in smart appliances, Moeser said. "If you have a Facebook page showcasing your products, why not add a Buy Button?"

The slow approach banks have taken has enabled the rise of many mobile wallet and faster payments providers, Moeser said.

"More usability in the mobile wallet will drive adoption, and that's why you see Apple considering P2P now," Moeser said.  

But it is not as if bank executives are oblivious to the current payments trends.

The large banks that make up clearXchange and its P2P initiative have a strong understanding that consumers mostly use P2P to send money as a gift, or to pay rent and other bills, Moeser added.

If there is a starting point to all of this, it's a critical factor for banks to be directly involved in developing faster payments.

As soon as banks "get over the faster payments hump in the next year or two," they will find themselves on a leading edge of bringing P2P, faster payments and wallet technology together, ABA's Kenneally said.

"The larger bank you are, the more resources you have and the better chance of being on that leading edge," he added. "For smaller banks, the decisions are more dependent on core providers, and they have to be fast followers in the second wave."

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