mbanking is the future
Posted by BuzzCity on 20 Mar 2014
Smartphones are now the primary, and in many cases, preferred device to access e mail and internet around the globe.
Alongside the functional everyday use of mobile phones, e mail, surfing, socialising and shopping - we are also seeing a rise in the adoption of mobile banking (or mbanking). mbanking allows customers to bank or pay for goods or services (online or in shops) without the need for cash or a credit card.
There are currently some big developments in mbanking. There was the recent announcement on the launch of Paym, the banking industry’s new mobile phone payments system, which promises a new secure way for consumers to send payments directly to each other’s current account using just a mobile phone number.
This follows on from the announcement of the launch of Zapp that will allow its customers to pay for goods or services in shops or online (without the need for cash or a credit card) to their smartphone and tablet apps.
Fear of the unknown
But, despite these advancements in the mobile payments industry, according to recent BuzzCity research (The BuzzCity Report Vol 3 Issue 4), only 26% of mobile users are using their phones for financial or banking transactions, while another 16% are considering using their phones.
Why is this? It seems that there are three main barriers to adoption which are fear, suitability and awareness. The BuzzCity report found that that 34% of respondents won’t mobile bank for fear of security ‘issues’ and 30% felt that they didn’t have a suitable device. A further 12% stated that mobile banking facilities were not yet available to them.
So why is it not yet universally adopted by the masses? As we’ve stated, one of the main challenges for consumers is a general lack of awareness combined with the ‘security’ fear. Many people, particularly the older generation, still aren’t ready to have their personal banking details stored in a mobile device, even though it is secure.
According to a PriceWaterHouseCoopers report 85% are afraid of their phones getting stolen, 79% are afraid of having their information stolen while transmitting payments wirelessly and 74 % are afraid of having too much information in the same place. But we must consider that paying with plastic is equally if, not potentially more, dangerous in today’s identity theft society.
For those who are mbanking, the top three most-used banking features include balance enquiries (30%), bank transfers (26%) and cash withdrawals (28%), indicating that ‘self-serving’ banking is currently the most popular banking option.
mbanking for shopping
Only a fraction (15%) of smartphone users regularly their devices to regularly purchase goods and services from merchants or retailers, even with established apps such as PayPal. So it’s clear that businesses need to embrace and support the mobile payment revolution with better mbanking strategies to reap the benefits from the potential market.
Alongside this, it is essential that banks, credit providers and retailers make a concerted effort to communicate the ease of use, security and benefits and advantages of mbanking to encourage more global adoption by the masses. Because education equals empowered consumers.
Article written by Dr KF Lai, CEO, BuzzCity