- Bank sets up MVNO. e.g., Rabo Mobiel
- Bank issues / distributes NFC phones, might start off this journey by distributing NFC tags. E.g., Garanti Bank, Turkey. The user retains their MNO
- Bank subsidizes phones with separate secure element
- Bank can offer subsidized phone with optimized features (e.g., SIM but no separate secure element)
- To keep costs down, the phones offered by the MVNO would be basic no-frill devices. This may not appeal to early adopters or to niche audience
- Bank may not have core competence in being a MVNO
- MVNOs have been more successful in Europe
- Smaller markets with reasonably homogeneous demographics
- Aggressive banks could use this tactic to challenge incumbents
- MVNOs have had a tough record in the US, as it is difficult to appeal to a broad enough range of audience to reach critical mass. After the events of this week, I do not see any US bank having an appetite for such risk
Bank offers bank-branded NFC phone (separate secure element), with the user retaining their existing MNO/service provider. An early variation of such an offering could be Garanti Bank, Turkey providing NFC tags to its customers
- Bank has access to secure element on phone to provision cards...
- Bank does not have to get into a MVNO business, which typically is not the bank's core competency
- Bank can optimize the mobile device to suit its requirements
- Phones offered by the bank could be basic no-frill devices, which may be rejected by the larger audience
- Users not anxious to give up their existing phone as this is a personal device /statement
- Bank issued phone may not be a good enough phone (neither fish nor fowl)
- Users in Asia typically buy their own phones. This offering might appeal to the burgeoning value-conscious middle-class in China and India
- A weak MNO in the US could work with a strong Bank and an open phone (did somebody say Android) to help MNO's sales and perception in the marketplace.
- Consumers get choice of phone. No compromise in device features
- Cost of separate secure element not passed on to the consumer
- Would not work where consumers typically get their phones from their MNO (tied to a contract) as the MNO controls the BOM/configuration of the phone. E.g., US
- Consumers buy their own phones.
- Device vendor has better brand presence and distribution channels