Coming Soon to the U.S.: A National Standard for Mobile Financial Services
The use of mobile devices for mobile banking and payments at the point of sale (POS) or remotely (e.g., mobile application, in-application, browser) continues to grow. Juniper Research reports that global mobile commerce (m-commerce) payments will reach $3.1 trillion in 2025, from $2.1 trillion in 2020. The Census Bureau estimates that U.S. retail e-commerce sales for the second quarter of 2020 increased 44.5 percent over the second quarter of 2019. Business Insider Intelligence forecasts that by 2024, 44 percent of all retail e-commerce will be generated via m-commerce. Smartphones are now a driving force behind m-commerce growth, with notable increases in both digital buyers and average spending per buyer due to the global pandemic. In spite of these projected growth trends, the market remains highly fragmented, with many different solutions available to consumers, financial institutions (FIs), and non-FI mobile service providers. The U.S. does not have an open standard specific to Mobile Financial Services (MFS) that mirrors the international version, ISO 12812: Core Banking – Mobile Financial Services, published in 2017. To address this gap, the Accredited Standards Committee (ASC) X9, Inc., launched a workgroup to develop American National Standard X9.134 in 2019 modeled after ISO 12812. X9.134 recognizes industry changes since 2017 and reflects the U.S. perspective. The X9.134 standards framework will support: (1) interoperability between MFS components and functions; (2) a better consumer experience when choosing among mobile devices or products; and (3) a secure environment to ensure trust in the mobile financial service provider (MFSP) and enable FIs and payment processors to manage risks.