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June 22, 2012

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What is Mobile Wallet & Why are big banks afraid of it?

Mobile walletIf banks thought the worst was over, they need to think again. Fortunately, it doesn’t have anything to do with problems in the real estate market, financial regulation or even shareholder dissatisfaction. This time, mobile wallet are instilling fear within the banking industry. In short, mobile banking makes it really easy for anyone to connect to their bank and make payments or check their account.

What is a Mobile Wallet?

A mobile wallet is a small smartphone app that allows users to store their credit card or bank account details in their smartphone. When they make a purchase, all they have to do is make a digital transaction. This could be through a simple swipe at a reader or a simple transfer from the app.

Not only does this make transactions easier, it makes them incredibly fast. If you want to check your bank account details on your smartphone, all you require is an internet connection. You can find internet plans here.

Why is it Creating a Problem

When you think about it, why would it not create a problem? Nobody has to come into a bank anymore, use a credit card or even write a check. All they would have to do is pull out their smartphone and make an online transfer or complete the transaction by swiping their card. They no longer have to fill out a check or carry around their credit card.

According to a research study done by Carlisle & Gallagher Consulting Group (CG), almost half of the United States is interested in using a mobile wallet for all their transactions, banking needs and account queries.

Furthermore, 76% of the volunteers stated that they either already use mobile wallet and banking or intend to use them shortly. This research study shows that people are really interested in leaving traditional banking and moving to digital means.

Furthermore, many mobile wallet offer a lot of incentives and advantages that traditional banking does not. For example, you never have to carry 5 credit cards with you. All you have to do is carry your smartphone. You will never have to worry about going to the bank to check your account’s status. With a simple touch, you can check your account information from literally anywhere in the world.

80% of the surveyed consumers stated that they would prefer to use PayPal as their primary mobile wallet. This is primarily due to the familiarity they have with PayPal. 60% of the total also stated that they would not mind using Google or Apple as their primary mobile wallet.

What Needs to be Done?

However, not everything is rainbow and sunshine when it comes to mobile wallet. Considering that this technology is new, there are still a lot of kinks to work out. Furthermore, the problem with familiarity still exists. Most people are used to traditional banking and may have a hard time adjusting to the new system. This may make them reluctant to use a mobile wallet.

Furthermore, if people worried about their wallet being stolen, the same problem exists with mobile wallet. If your mobile gets stolen, you are out of luck. This is primarily because each mobile wallet account is specific to a certain handset. You cannot immediately switch to another handset in case you lose the first one. Furthermore, you need an internet connection to use the services.

Solution

According to the Card and Payments Practice Leader of CG, Peter Olynick, banks will need to change their methods because the threat from mobile wallet is real. Consumers are starting to look for new and easier ways to bank.

According to Peter, people have already started to stop using their checks or even make cash payments. Furthermore, people have slowed down their use of traditional banking considerably for mobile wallet. He predicts that within 5 years, half of all smartphone users will be using mobile wallet instead of traditional banking methods.

With better and more efficient tools at their disposal, why wouldn’t you switch to a mobile wallet? If banks want to keep to their traditions, they will need to pull a rabbit out of the hat; so to speak.

The above article is written exclusively by Roxanne Peterson

 


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About the author

Snehil Khanor wrote 131 articles on this blog.

Snehil Khanor - Entrepreneurial Spirit, Techie, Gadget Freak, Blogger, Dreamer, Internet Visionary, Foodie, Delhiite, Wannabe Artist ,To-be Engineer with a heart of a Poet. 😉

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5 Comments Post a comment
  1. Mar 31 2013

    I want to say that this article is awesome, nice written and include almost all vital info. Very cool and clearly written! Respect!!!

    Reply
  2. Apr 1 2013

    Hope to see such a informative stuff in future! Very impressive your very clear expression! Thank you!!!

    Reply
  3. Apr 8 2013

    Nice effort, very informative, this will help me to complete my task. That was very informative and very entertaining for me!!

    Reply
  4. Apr 15 2013

    Blogs are so interactive where we get lots of informative on any topics. But expected more from such an important topic!!!

    Reply
  5. Sep 2 2013

    Those are pretty solid reasons – but the biggie I believe is battery – it’s the same reason I have e-boarding on my phone but I still print a paper copy. I’ve have my battery die at the worst time and if I have to carry an extra battery, I might as well carry a small card or piece of paper.

    Reply

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