U.S. Bancorp (NYSE:USB) is putting in a lot of effort to come up with innovative ways for its customers to carry out banking operations easily using their mobile phones. The bank released three separate sets of mobile-linked services and solutions over the last two weeks alone. Over the fortnight, the bank launched its new banking application for the iPad, a co-branded credit card application for Android, and its MobileMerchant payment solution for mobiles. The focus on mobile technology comes as no surprise as a low-interest rate environment and similar banking products by competing banks including Wells Fargo (NYSE:WFC) and JPMorgan Chase (NYSE:JPM) has made customer convenience a major differentiating factor in the banking industry.
We maintain a $34 price estimate for U.S. Bancorp’s stock, about 10% higher than its current market price.
U.S. Bancorp has shown a flurry of activity in terms of mobile solutions for its customers in the recent past. Last month, the bank introduced the Ace Rewards Visa Application for the iPhone, followed by the launch of its Augmented Reality application which allows users to find branches and ATMs on their iPhones.   This month, the bank extended these offerings for the iPad too.
The bank has also been pushing the envelope on the use of mobile phones for credit card services. It has expanded its co-branded credit card application offering, which boasts of allowing a customer to receive a co-branded card from select retail partners so quickly that they can pay using the new card before leaving the store. 
A more significant offering is the MobileMerchant payment solution that targets small businesses, allowing them to use a mobile device to make secure card payments.  MobileMerchant was developed and is offered by the U.S. Bancorp’s global payment solutions providing subsidiary, Evalon.
Clearly, MobileMerchant aims at increasing the number of merchant transactions it processes and thereby directly increasing its revenue from payment services. On the other hand, the series of mobile phone apps that allow customers to perform functions like depositing checks, making person-to-person payments, viewing account balances & transactions, and paying bills aims at drawing more customers toward its retail banking service offerings is a smart move considering the rapidly growing tech-savvy clientele.Notes:
- U.S. Bank Introduces Ace Rewards® Visa® Application for iPhone®, U.S. Bancorp Press Releases, Apr 10 2012 [↩]
- U.S. Bank Introduces Augmented Reality iPhone® Application to Find Branches and ATMs, U.S. Bancorp Press Releases, Apr 11 2012 [↩]
- U.S. Bank Releases a Cobranded Credit Card App for Android™, U.S. Bancorp Press Releases, May 24 2012 [↩]
- Elavon MobileMerchant Enables Commerce on the Move, U.S. Bancorp Press Releases, May 29 2012 [↩]