CAMP PENDLETON, Calif.-Mobile banking transactions cost less than transactions at every other channel, according to mobile vendors and analysts, but credit unions that offer mobile banking can't confirm that claim.

Mobile transactions ring in at just eight cents per transaction, according to an October report by TowerGroup, Fiserv, M-Com and VeriSign. Meanwhile, the deposed king of cheap transactions, Internet banking, is double the cost at 17 cents per transaction, said the report, "Mobile Banking Among Offline Consumers."

Financial institutions pay an average of 85 cents per ATM transaction, and audio response, call center and branch transactions cost $1.25, $3.75 and $4.00 respectively, said the report.

Not all credit unions buy the theory that mobile is cheapest. "I don't believe the hypothesis is true," said Brad Smith, VP-strategic development at $591-million Pacific Marine CU (PMCU) in Camp Pendleton, Calif. "I'd like to know how they calculated their numbers because I think there are some subjective variables to be considered."

Smith said it's likely automated telephone system (ATS) transactions cost the least. "My analysis is more real-world than 'consultantspeak'," he added. "But it's hard to say whether the ATS or Internet banking is the cheapest because you're not comparing apples-to-apples."

ATS transactions cost the CU two cents per transaction, said Smith. PMCU members complete about 64,000 ATS transactions per month. The ATS system counts account balance and history requests as transactions because the member has to explicitly request the data as a function of using ATS.

Define 'Transaction'

In contrast, Internet banking at Pacific Marine costs 13 cents per transaction, Smith continued. The caveat: the Internet banking system can't accurately count account balance and history transactions because a member may simply log-in and glance at balances and history. The system can't count that glance as a transaction, said Smith. In that light, the 76,000 monthly Internet banking transactions at Pacific Marine would cost less than 13 cents per transaction.

Mobile transactions cost a bit more than Internet banking, Smith said. Although Pacific Marine doesn't separate mobile transactions from Internet banking-they basically run through the same "teller"-the CU pays an additional per-user charge for mobile members, he said. Between 5% and 8% of Internet banking members at Pacific Marine actively use mobile banking, Smith said.

For Baxter CU in Vernon Hills, Ill., which built its own mobile banking platform, mobile transactions cost the same as Internet banking transactions. "Mobile is just another skin we put over our homebanking platform," said Jeff Johnson, SVP, CIO of IT at the $1.4-billion CU.

Credit Union Journal asked six mobile banking vendors to provide credit union data that substantiate the theory that mobile banking transactions cost the least. None of the vendors could supply client statistics, but many said they are working on it.

Still A Good Bet

When it comes right down to it, ATS, the Internet and mobile are all a good bet, even though ATS and mobile transaction types are limited and ATS is not very user-friendly, Smith said. "The bottom line is that all these delivery channels are extremely cost- effective compared to brick and mortar, call centers, ATMs or shared branching."

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