AUSTIN, Texas – Fresh from a 24-hour whirlwind in Austin at NACHA’s 2011 Payments conference, a number of announcements emerging from the trade show struck me as relevant to Bank Innovation members. One of the most notable sentiments bubbling up in sessions and in one-on-one meetings is that banks’ budgets are blossoming, and they are ready and poised to invest in IT this year and in 2012. Beyond that general trend of promise to the financial services technology community, below are three specific news items that surfaced from industry players in Texas this week:

With PayPal’s Backing, Discover to Launch P2P Services this Month

PayPal is making it easier to say goodbye to checkbooks by partnering with banks and credit card companies.

First leaked last year, the PayPal + Discover Financial Services partnership will go live this month, granting cardmembers P2P capabilities. The pair’s new service, dubbed Money Messenger, allows Discover customers to pay other people. In short, Discover customers can send payments to people by entering their emails or cell numbers through their smartphones or through Discover.com. A recipient will receive a text alerting him of a payment, as well as a prerecorded call if he isn’t already a PayPal customer.

The new service is built off of PayPal’s Adaptive Payments API.

Additionally, PayPal has signed a number of banks to include its P2P services and will go live with USAA Bank sometime later this year, Dan Schatt, head of financial innovations senior director at PayPal, told Bank Innovation. PayPal also has goals to deploy its technology on ATMs, a channel that PayPal views as an opportunity to do remittances, said Schatt.

Broadly, Schatt views P2P as an area where banks can recoup possible lost debit interchange revenue. Plus, P2P capabilities, he noted, help save banks across the nation on costs incurred from paper checks.

Mobile Banking Awaits Millennials to Age Before Exploding

Once millennials age, mobile banking will take off.

That was one primary point delivered in a presentation by Debbie Bianucci, president and chief executive of BAI. 

Though lingering security concerns abound from the population who grew up on paper checks — hurting the ubiquity of mobile banking takeoff — the newer banking channel will explode once millennials grow up.

“The millennial generation will have a huge impact before we know it,” said Bianucci. “Mobile is not yet explosive, because most payments are dominated by non-millennial segments. As time goes on, that’s where you will see explosion.”

Additionally Bianucci said debit as a preferred payment option has grown and anticipates it to continue to grow. One reason why? Consumers are more focused on budgeting.

Fiserv Partners With Cardlytics to Deliver Merchant-Funded Rewards

With Durbin scaring a number of banks from continuing to offer rewards programs, vendors are trying to fill that void. One solution? Rather than banks ponying up for the rewards, merchants can fund the programs.

With that in mind, Fiserv Inc. has inked a partnership with Cardlytics to deliver merchant-funded rewards through Corillian Online. In short, the partnership allows Fiserv’s financial institutions to offer targeted rewards to their customers while they do their online banking.

Beyond that partnership news, Steve Shaw, director of strategic marketing at Fiserv, alerted Bank Innovation to a survey Fiserv will release next week that looks at banks’ mobile banking strategies. Though the results are somewhat under wraps, Shaw said the conclusions were “a little disturbing.”