INSIDE Contactless Launches Initiative to Jumpstart Mobile Payments

INSIDE Contactless has announced an initiative that it says “creates a new class of mobile payment solutions that banks, brands, transit agencies and others can deploy quickly, easily and in a highly targeted way starting in 2010. INSIDE has already engaged with several innovative technology companies that share its vision to develop a variety of mobile payment solutions based on INSIDE’s proven, certified MicroPass(r) platform that will enable existing mobile phones to support mobile payments, as well as transit, ID and access control applications. A number of these solutions expected to reach the market as early as this fall.”

“We have launched this initiative because we see an opportunity to support our partners and customers with a new class of MicroPass payment options designed to enable alternative mobile payment solutions as early as the start of next year,” said Charles Walton, executive vice president for INSIDE Contactless. “As the leader in contactless payment solutions, INSIDE has the core chip hardware, optimized operating system, applications, reference antenna designs, technical expertise and other tools our partners can use to build a new class of solutions that can connect to existing mobile phones through various means to turn them into powerful payment devices.”

INSIDE has pioneered the first suite of add-on mobile payment solutions, contactless sticker products based on INSIDE’s MicroPass platform. Mobile handset stickers can turn just about any personal item – from a mobile phone to an employee ID badge – into a payment device. Although not electronically connected to the phone, these stickers are able to support debit, prepaid debit and credit card payments, and are convenient plastic card replacements.

Several new mobile payment solutions coming to market from partners through INSIDE’s initiative will enable mobile phones to integrate with a MicroPass-based secure element outside the phone, enabling solutions to be deployed more rapidly in 2010. Using microSD cards, existing BlueTooth channels, existing data connections, and other methods to communicate with the phone, these peripheral solutions will open the door to more robust, NFC-like payment, transit and access control applications in a next phase of deployment. These solutions will allow a mobile phone user to easily make a payment from among several virtual credit or debit cards stored within the mobile payment peripheral device, see the balance remaining on prepaid debit cards or transit passes, and even collect and redeem coupons and loyalty points.

“INSIDE is in a unique position because of our relationships with bank card issuers, transit agencies, brands, access control companies and others, as well as with the technology innovators who are trying to produce new kinds of mobile payment solutions, and we have proven contactless payment chip platforms that have been certified by the major card brands,” said Walton. “Whether it’s NFC or a mobile payment peripheral solution, INSIDE can provide compatibility and a future evolution path because the same chips, the same operating system, the same performance, the same security and the same interface that works with the same contactless readers are utilized.”

MicroPass products have already been approved by Visa, MasterCard and Discover Network for use in a number of card products, providing manufacturers with an advantage as they work towards final product qualification.

The MicroPass family of intelligent hardware platforms are used to power more certified payment products than any other contactless technology, and have been designed from the ground up to support multiple contactless applications, including contactless payment, transit fare collection, access control, retail loyalty programs and lightweight ID applications. Its low power and high performance, combined with fast transaction time and outstanding read distance, enables MicroPass to deliver a superior user experience for a broad range of new mobile payment solutions.

Technology companies developing mobile payment solutions who would like to participate in this initiative, as well as banks, retailers, transit agencies, access control companies and others who are interested in developing new mobile payment applications, should contact INSIDE Contactless for more information.

Use of Contactless Chip Cards Can Reduce U.S. Payments Fraud

The Smart Card Alliance has released a new white paper titled “Fraud in the U.S. Payments Industry: Fraud Mitigation and Prevention Measures in Use and Chip Card Technology Impact on Fraud” developed by its Contactless and Mobile Payments Council.

“Criminals are known to exploit the weakest link in a payments infrastructure. With issuers in the rest of the world moving to EMV, it is likely that criminals are going to move counterfeit card activities to the U.S., attacking both U.S. and international issuers,” said Randy Vanderhoof, executive director of the Smart Card Alliance. “If the United States wants to avoid an incoming tide of higher loss, the industry must be willing and able to make investments in emerging technologies.”

Much of the fraud on debit and credit cards in the United States results from activities like counterfeiting and card skimming. Credit and debit card fraud is possible because magnetic stripe cards use static data that can be copied and reproduced on fraudulent cards or used in an Internet purchase transaction. The Alliance does not see protection of data or better fraud detection techniques as the solution to the fraud problem. Rather, the solution is to replace this static data with dynamic data, because it renders stolen account or transaction information useless.

To achieve this goal, the Smart Card Alliance recommends contactless chip cards, already implemented throughout the United States. Current contactless payment devices generate dynamic cryptograms (encrypted codes), similar to those generated by EMV payment cards, so certain data on the card and the terminal change with every transaction. The authentication of the cryptogram assures the issuer that the card presented is authentic. If data is copied or intercepted at the reader, the data is already obsolete for future transaction attempts, and cannot be used successfully to counterfeit cards or replay transactions. Importantly, the current U.S. payments infrastructure can already handle the contactless payment dynamic cryptograms.

“Use of the contactless chip card technology already in place will set the stage for eventually moving to globally-interoperable EMV cards and terminals,” added Vanderhoof. “Once the payments infrastructure moves to EMV, U.S.-issued payment cards will benefit from the same highly secure and globally interoperable payments infrastructure as in the rest of the world.”

The new white paper provides an overview of current fraud levels in the U.S. and of projected trends based on the move to EMV outside of the U.S. The different approaches used by the U.S. payments industry to combat fraud are described, with a discussion of how new technologies and processes, particularly chip card-based technologies and processes, help to mitigate card-based fraud losses.

Participants involved in the development of the white paper include: Dynamic Card Solutions, First Data Corporation, Gemalto, Giesecke & Devrient, IBM, INSIDE Contactless, KeyPoint Consulting, MasterCard Worldwide, Visa Inc., ViVOtech.

Prepaid Cards Cheaper than Low Balance Checking/Debit Accounts

The Network Branded Prepaid Card Association has announced that, according to an economic study recently completed by Michael Flores of Bretton Woods, “consumers who opt to use a network branded prepaid card could pay as much as 35-70% less in fees as compared to low balance checking and debit accounts, making prepaid cards a far more cost-effective, valuable financial tool for many.”

The comparative economic analysis was conducted by economist Michael Flores of Bretton Woods, Inc, an expert on financial institutions. The study analyzed a range of payments options available to consumers, and their relative costs and benefits. It also looked at various kinds of prepaid cards, including analyzing the cost and benefits of both general purpose reloadable cards (the kind consumers buy for themselves) as well as prepaid cards tied to direct deposit (these are most often used by state governments to deliver benefits, by companies for payroll, etc.). While smaller studies have been done in the past, this is the first, comprehensive study that compares the costs of prepaid cards in the context of alternative financial tools.

“There is no question that prepaid cards are a much better option for many consumers,” said Flores. “An objective review of the costs associated with these cards compared to costs of alternatives such as basic bank checking account, in addition to the safety and security associated of prepaid cards compared cash, leaves no doubt that prepaid cards are a smarter option for many.”

Prepaid cards have risen in popularity among consumers in recent years. These cards offer many of the same benefits, including fraud and loss protections, as credit cards. However, they access funds pre-paid, eliminating the risk of debt or overdrafting. Prepaid cards open the door to large segments of the population who otherwise might not be able to access our card-based economy or consumers who want to more effectively budget their spending.

“The Bretton Woods report provide hard, empirical evidence behind the notion that network branded prepaid cards improve the lives of many people, by saving them money and time managing their finances,” said Kirsten Trusko, President of the Network Branded Prepaid Card Association (NBPCA). “Prepaid cards afford the consumer the flexibility and security benefits of a traditional credit card without the risk of running up debt and overdraft charges. That’s particularly critical in today’s tough economic climate. Today’s report goes a long way to silencing uninformed critics who want to remove this valuable tool as a financial option for millions of American consumers.”

To gain an appreciation of the costs to consumers using network branded prepaid cards, Flores assembled the pricing of basic FDIC insured checking accounts from the top four banks in the United States and the prices from largest providers of network branded prepaid cards in order to provide a basis of comparison of costs to consumers given similar usage patterns. The analysis also examined recent studies on a typical usage pattern for prepaid card users. The comparison revealed:

A typical consumer with a low balance checking account can expect to pay $200 to $350 annually. These costs include overdraft charges, ATM fees and minimum balance fees.

Consumers without access to traditional banking and without a prepaid card must rely on a patchwork system of money orders, check cashing services and bill-payment fees. The fees associated cost the user from $167 to over $312 annually.

A consumer who chooses a prepaid card instead of a bank account with direct deposit (commonly for payroll or a government benefit) may pay between $108 to $207, a savings of $96 to $146 over a basic checking account.

General purpose prepaid card users can expect to pay $215 to $320 annually

Contactless – the new easy way to pay

Contactless is the new quick and simple way to pay for small transactions using your debit or credit card. Barclays is leading the way with this new technology and is the first bank to issue contactless debit cards as standard to the majority of current account customers. You may even have yours already.

This short video should answer all of your questions and explain what contactless is, how it works and where you can use it.

VIDEO

Chase Launches Ink℠ – A New Small Business Card Portfolio

Chase Card Services has announced Ink℠ from Chase, a suite of business cards developed specifically for small businesses. The new business card portfolio includes four distinct cards “to deliver on the unique needs of small business owners and marks Chase’s introduction of a pay-in-full charge card – a first from issuers of Visa or MasterCard.”

“As a long-time bank for small businesses, we listened intently to the powerful aspirations and unique needs of small business owners for more control, flexibility and rewards in how they manage their business finances,” said Richard Quigley, president of Ink from Chase at Chase Card Services, a division of JPMorgan Chase. “We designed Ink to help keep small businesses balanced and moving ahead so they can continue to succeed.”

Chase engineered the Ink business cards to address fundamental financial needs of small business owners’ day-to-day operations – access to capital and improved cash flow. Ink from Chase’s four distinct cards – Ink Bold, Ink, Ink Plus and Ink Cash – deliver solutions based on a small business owner’s spending habits, cash flow needs, and the desire to earn and redeem valuable rewards based on their preferences.

Small business owners who use Ink from Chase have access to a core set of business tools including:

• Ability to earn rewards on all business spending and redeem for items that can be reinvested back into the business or for personal use through Chase’s Ultimate Rewards℠ program or cash back;
• Online expense management tools to manage their business spending, complete with online reporting capabilities as well as customized reports on spending that can be categorized, sorted and downloaded to accounting software for easy tracking and tax purposes;
• Additional cards for employees with individual spending limits and custom alerts delivered via email or text to track employee spending – all while earning rewards from employees’ purchases;
• Ability to control and customize payment terms through Blueprint℠ – small business owners can choose to pay a minimum, portion or full balance each month;
• Access to a dedicated team of business card specialists who understand the unique financial needs of small business owners; and
• Additional security with fraud and purchase protection features that provide peace of mind for small business owners.

Ink Makes Its Mark

All Ink business cards are accepted at twice as many locations worldwide as American Express, supported by Chase’s 5,200 bank branches and their trusted staffs, and are designed to meet the individual needs of small business owners:

• Ink℠ Bold – Chase’s first pay-in-full charge card with no interest charges is designed for small business owners who want robust purchasing power and spending capacity that adjusts dynamically, giving them the purchase power needed to meet their businesses’ changing needs. With Ink Bold, small business owners will earn premium rewards from business purchases with no limit on how many points may be earned, the points do not expire and rewards points are worth 25 percent more when redeemed for air travel through Ultimate RewardsSM. Cardmembers can earn an annual spend bonus of up to 47,500 points, and they also have direct access to Chase business card specialists. Ink Bold has no annual fee for the first year and $95 thereafter.
• Ink℠ – Developed for small business owners seeking business-sized credit limits, flexible payment options and online expense management tools with the ability to earn rewards from business purchases with no limit on how many points may be earned and the points do not expire. Ink has no annual fee.
• Ink℠ Plus – The solution for small business owners seeking business-sized credit limits, flexible payment options, online expense management tools and the ability to earn rewards from business purchases, including extra travel benefits with no limit on how many points may be earned and the points do not expire. Rewards points also are worth 25 percent more when redeemed for air travel through Ultimate RewardsSM and cardmembers can earn an annual spend bonus of up to 25,000 points. Ink Plus has no annual fee for the first year and $60 thereafter.
• Ink℠ Cash – Designed for small business owners seeking unlimited cash back and accelerated earnings on everyday business purchases: dining, fuel, home improvement and office supplies. Ink Cash provides business-sized credit limits, flexible payment options and online expense management tools. Ink Cash has no annual fee.

“Seventy percent of small business owners spending is done through checks – the same payment method that has been used for generations,” said Mike Nagle, general manager of Chase Card Services. “We’re revolutionizing this approach by giving small business owners more benefits for using their card. As the next generation of small business payment solutions, Ink from Chase gives small business owners the tools to simplify financial reporting, manage their cash flow and maximize reward benefits.”

Analyst Ken Paterson, VP and director of the Credit Advisory Service, Mercator Advisory Group, said, “The country’s 27 million small businesses are critical to driving our economic recovery. Chase’s product initiative provides small businesses a range of credit, payment and financial management resources that have been constrained in recent months, and I’m delighted to see companies like Chase listening to small business owners and offering them the financial footing needed to succeed.”

Chase is supporting Ink with an integrated marketing program, including a national advertising campaign beginning this fall.

For More About Ink

To get more information about Ink from Chase and find the card that is right for their business, small business owners can visit http://www.inkfromchase.com/.

NetSpend Adds “Virtual Card”, Online Financial Management Tools

NetSpend has announced the availability of the first “virtual” card to be tied to an existing prepaid debit card account and a suite of online financial management and budgeting tools including a visual spending history report, online budgeting application and budgeting “report card.” NetSpend says these new products and applications “provide a level of convenience and security currently not provided to the estimated 50-100 million underbanked consumers in the United States.”

“What we’ve seen in the ten years we’ve served the underbanked consumer is that they typically manage their cash flow very carefully. As soon as they are paid, they pay their bills and other obligations—every dollar counts and overspending simply isn’t an option,” said Dan Henry, chief executive officer at NetSpend. “The NetSpend virtual card and online financial management tools bring a level of convenience and security that allows them to not only plan their spending, but monitor and safeguard their money as well.”

Virtual Card

A first in the prepaid debit card industry, the NetSpend virtual card acts just like an additional card on the account and is available to current cardholders through the company’s online account center at NetSpend.com. The virtual card can be created or deleted on demand, can be accessed—or created—via a mobile phone and can be used for any card-not-present transaction. The virtual card is designed to add a level of security and convenience for NetSpend cardholders. Because it can be instantly deleted after a purchase, the virtual card adds an extra layer of protection for account holders who are shopping online or on the phone. Its instant issue functionality allows it to also act as a temporary backup when a customer loses their physical card—eliminating the waiting period to receive a replacement.

Visual Spending History

Government figures show that many households with total income of $50,000 or less—a prime demographic for the prepaid debit industry—are spending more than they bring in. The visual spending history helps to manage a cardholder’s money by automatically categorizing all transactions into an easy-to-read pie chart. This simple presentation helps them see where they have been spending their money and to browse and search expenses by month, category or merchant.

Budgeting Application and “Report Card”

Taking the information from the visual spending history to another level, the NetSpend budgeting application and “report card” helps customers set spending limits by category and to monitor their money throughout the month through cardholder-set spending targets. Expenses are automatically categorized in real-time and the cardholder can set up free text or email alerts that notify them when they are close to—or over—budget in each of their categories. The “report card” feature then shows the user how realistic their goals are based on their budgeting and spending history.

Support Grows for MasterCard Advanced Authentication for Chip

MasterCard has announced that it has approved personal card readers and authentication servers from four vendors for MasterCard Advanced Authentication for Chip – a new EMV authentication solution that leverages the hundreds of millions of EMV cards already in the wallets of cardholders. According to MasterCard, “banks looking to manage the growing threat of online fraud can today deploy this best-of-breed two-factor authentication solution by working with leading providers to the payments industry: DSSS, Gemalto, Logos and Thales.”

The Advanced Authentication for Chip is the latest evolution of the Chip Authentication Program (CAP) solution that allows cardholders to authenticate themselves using their existing EMV banking card and a personal card reader issued by their bank. The reader generates single-use password that can be used for e-banking transactions, e-commerce, telephone authentication or a whole host of other uses where the customer is not face-to-face with the bank or merchant: these transactions are known as Card Not Present.

With a MasterCard-commissioned survey showing that 84% of UK and Benelux cardholders think that their bank should have responsibility for online banking security, it is important for the reputation of banks for them to deploy effective and simple security systems. As Advanced Authentication for Chip replicates the same simple process that cardholders are accustomed to from chip-enabled retail environments, it makes remote authentication easy for them to understand, and easy for them to use.

Unlike a standard authentication token or paper-based system, Advanced Authentication for chip allows part of the transaction data to be included in generation of the password – this means that banks can get cardholders to create a unique signature for the transaction and is a major leap forward in the prevention of man-in-the-middle attacks, a huge problem in e-banking and e-commerce.

Art Kranzley, Chief Emerging Technology Officer at MasterCard, said, “Our solutions are only as strong as the support they receive from the vendor community. Advanced Authentication for Chip offers tangible benefits to issuers, cardholders and merchants. Vendor solution components are approved by MasterCard to ensure high standards and global interoperability.”

“Several million online customers have already been using Gemalto’s complete CAP solution for authentication and transaction signature, including server and readers,” added Cédric Collomb, senior vice president, Identity and Access Management at Gemalto. “Now, our Advanced Authentication for Chip solution will allow more online banking customers to use standardized chip-based authentication across the world.”

Franck Greverie, vice president, managing director for the information security activities of Thales concludes “Our support for Advanced Authentication for Chip demonstrates our continued commitment to working with MasterCard so that our customers are able to make online and Card Not Present transactions safer for EMV cardholders, and dramatically reduce fraud.”

Nokia Introduces Nokia Money for Mobile Financial Services

Nokia has introduced Nokia Money – a new mobile service operated in conjunction with Obopay – calling it “a new mobile financial service offering consumers with mobile device access to basic financial services. For many consumers, this will be the first time they have had any access to such financial services.”

According to the company, “Nokia Money has been designed to be as simple and convenient as making a voice call or sending an SMS. It will enable consumers to send money to another person just by using the person’s mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere, meaning savings in travel costs and time. Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts.”

“We believe mobile financial services offer a market opportunity with long term growth potential. In many countries, mobile phone ownership significantly exceeds bank account usage, suggesting that many mobile phone users have very limited or no access to basic financial services. With more than 4 billion mobile phone users and only 1.6 billion bank accounts, global demand for access to financial services presents a strong opportunity to combine mobile devices with simple but powerful financial services such as Nokia Money,” said Mary McDowell, EVP and Chief Development Officer, Nokia.

Mobile payments will be the next step for delivering financial services to hundreds of millions of people, both urban and rural, who are underserved by existing payment means, especially in emerging economies.

“Rural consumers will particularly benefit from money transfers and, for urban consumers used to online services, we are enabling services such as payment of utility bills, purchase of train and movie tickets, top-ups, all through their mobile phones. Nokia Money is simple to use, secure and available across different operator networks and on virtually any mobile phone. This means millions of new consumers will soon be able to manage all their financial needs from their mobile phone,” said Teppo Paavola, VP and Head of Corporate Business Development, Nokia.

The Nokia Money service will be operated in cooperation with Obopay, a leader in developing global mobile payment solutions, which Nokia invested in earlier this year. The service is based on Obopay’s mobile payment platform, with unique and newly developed mobile elements. Nokia intends the service to be open and interoperable with other payment services as well.

“Obopay shares Nokia’s vision for bringing mobile financial services to millions of people worldwide. We’re excited that Nokia has chosen Obopay’s platform. Nokia’s leading market position, strong brand recognition and global distribution channel, using the Obopay platform with uniquely developed mobile elements, means the Nokia Money service is well positioned to bring the next generation of mobile payment services to the world,” said Carol Realini, Founder and CEO of Obopay.

Nokia Money is the result of a powerful collaboration Nokia is forging between different partners in different markets around the world. It is designed to work in partnership with mobile network operators and financial institutions, involving distributors and merchants in a dynamic ecosystem to seamlessly provide the new services.

“As a result of the innovative partnerships and comprehensive ecosystem we are forging with the banking and financial industry, as well as leading network operators, we believe Nokia Money will bring financial inclusion to many who currently have limited or no access to financial services. Uniting the strengths of the mobile and financial services industries will change the way people around the world can manage their money in the future,” added McDowell.

“Mobile financial services present a high growth sector for Nokia. Nokia’s asset strengths, including consumer brand awareness, distribution capabilities and global relationships should serve as logical and necessary extensions to drive innovation in the mobile payments and banking sector. To be successful Nokia must provide a legitimate bridge between operators, banks networks and security infrastructure in order to unlock the broad uptake of mobile financial services,” said Bob Egan, Global Head of Research and Chief Analyst, Towergroup.

The Nokia Money service will be shown for the first time at Nokia World on the 2nd and 3rd of September 2009 in Stuttgart, Germany, and it is planned to be rolled out gradually to selected markets, beginning in early 2010.

Consumers Want Person-to-Person Payments Services From Banks

CashEdge has announced results from its fourth annual Consumer Online Banking Survey saying it “demonstrated an increasing demand for simple, secure person-to-person (P2P) payment services and the preference by consumers to get these services from their financial institution, rather than an independent service such as PayPal. Conducted annually by CashEdge, the study examines the behavior and preferences of more than 850 consumers nationwide aged 18 years and older who use online banking capabilities.”

“This year’s survey demonstrates that not only has online banking clearly become a mainstream application for consumers, but consumers are now demanding more money movement services from their financial institutions, like person-to-person payments,” said Sanjeev Dheer, CEO, CashEdge. “Additionally, we found that consumers would prefer to use their financial institution over an independent network to deliver these services – citing trust in their bank and convenience as key factors in this decision. This represents a tremendous opportunity for banks to compete in the lucrative P2P payments space.”

The results further revealed an increasing use of online money movement services and a growing interest in mobile banking capabilities. Key findings include:

Online Banking Usage Remains Strong

According to the survey, online banking has become a mainstream application for consumers:

• 81 percent of respondents currently access their financial institution online at least four times per month
• 89 percent expressed a desire to ultimately move all banking and financial transactions online

Consumer Interest in P2P Payment Services from Banks is Growing

Consumers are seeking additional online money movement services, including the ability to transfer funds to their friends and family in a simple, secure and convenient way. According to the 2009 survey:

• 81 percent of respondents would use a P2P service if offered by their financial institution
• 77 percent of respondents would prefer to use a P2P service offered by their own financial institution over an independent online P2P service (such as PayPal or a similar service)
• 73 percent of respondents felt that a P2P service offered through their bank would be more secure than an independent P2P service
• 69 percent of respondents felt that a P2P service offered through their bank would be more convenient than an independent P2P service

Consumers Desire Mobility

This year’s survey highlights that consumers are interested in mobile banking and would use it to conduct a variety of banking functions. According to the survey, 32 percent of respondents would use mobile banking technology if offered by their bank.

About CashEdge’s Fourth Annual Consumer Online Banking Survey

Commissioned by CashEdge in June 2009, the survey polled more than 850 consumers nationwide aged 18 years and older who use online banking capabilities. These respondents described themselves as bank customers (76 percent), credit union members (22 percent) and customers of “direct/virtual banks” (2 percent). The margin of error for the survey is three percent. The survey was conducted by the independent research firm Zoomerang.

Bank Will Allow Customers to Deposit Checks by iPhone

The Internet has taken a lot of the paperwork out of banking, but there is no avoiding paper when someone gives you a check. Now one bank wants to let customers deposit checks immediately — through their phones.

USAA, a privately held bank and insurance company, plans to update its iPhone application this week to introduce the check deposit feature, which requires a customer to photograph both sides of the check with the phone’s camera.

“We’re essentially taking an image of the check, and once you hit the send button, that image is going into our deposit-taking system as any other check would,” said Wayne Peacock, a USAA executive vice president.

Customers will not have to mail the check to the bank later; the deposit will be handled entirely electronically, and the bank suggests voiding the check and filing or discarding it. But to reduce the potential for fraud, only customers who are eligible for credit and have some type of insurance through USAA will be permitted to use the deposit feature. Mr. Peacock said that about 60 percent of the bank’s customers qualify.

USAA may seem like an unlikely innovator in mobile banking. It ranks in size just below the top 20 banks in the United States, and serves mostly military personnel, though many of its products are available to anyone.

But with just one branch, in San Antonio, and customers deployed all over the world, the company has been aggressively developing an anytime, anywhere banking strategy. Three years ago, it introduced the option of depositing a check from home using a scanner. That laid the groundwork for the phone deposit feature, which USAA plans to offer on other phones this year.

“Mobile is going to be a bigger part of how people do commerce and how they interact with their financial institutions,” Mr. Peacock said. “The great value that we see is the time savings.”

About a million of USAA’s 7.2 million customers use their cellphones to access their accounts — either via text message, a mobile browser or an iPhone application introduced in May. The deposit feature, which USAA previewed in an online video in June, puts the bank in the vanguard of the effort to turn cellphones into portable branches.

“USAA has been pretty progressive with this,” said Nick Holland, a senior analyst with Aite Group, a financial services research company.

The most popular banking tasks done on cellphones are reviewing account balances, transferring money, making payments and finding A.T.M.’s, analysts say. But in general, mobile banking has been slow to catch on. Mr. Holland said tighter budgets have forced banks to focus on using technology in ways that cut costs or generate revenue, rather than simply creating buzz.

“If banks can get people to stop calling call centers for mundane inquiries and instead send a text message,” he said, “that saves a bank about $14 for every one of those inquiries.”

Mr. Holland predicted that other banks would follow USAA and offer some type of mobile deposit capability, especially deposit options aimed at small-business customers who may be willing to pay for the convenience.

A study released recently by comScore, a digital audience measurement company, found that more than 15 million people in the United States used mobile banking each month, a number that is expected to grow as networks become faster and more people migrate to smartphones.

“It’s the iPhone that really propelled things to the forefront,” said Marc Trudeau, a senior director at comScore.

While comScore found that just 3 percent of mobile banking customers use Apple devices, Mr. Trudeau said the iPhone had paved the way for applications that let customers accomplish tasks more efficiently than with a phone’s Web browser.

For instance, Bank of America, which has an iPhone app, has more than three million mobile banking customers, and 43 percent of them bank with an iPhone or iPod touch, said Tara A. Burke, a company spokeswoman.

A cellphone is also always at hand, so it is potentially a more convenient than a computer. In fact, comScore found that people most often use mobile banking services at home.

“We’ve all seen the ads showing people banking from a beach in the Caribbean,” Mr. Trudeau said. “The reality is much more mundane than that.”