Mobile phones are increasingly becoming the preferred platform for banking services across the globe. Besides, the industry has also witnessed significant improvements in support, network availability and data speeds. These have convinced banks to use mobile banking as part of their multichannel optimization strategies.
MasterCard, for instance, announced late last year that it plans to open its API so it can further improve the smart phone payment system. Chase Bank, on the other hand, offers mobile deposit services which allow users to take a picture of a check when making a deposit or money transfer.
Even online payment services such as Paypal have introduced similar technology through its mobile application system. In developing countries such as India, mobile banking has become a fashionable trend, with the availability of inter-bank mobile payment services between seven major banks, among them State Bank of India, Union Bank, and Axis Bank. The projection by researchers is that there will be more than 150 million global users of mobile banking by the end of this year, amounting to almost US$22 billion worth of transactions.
Observations so far show that any new technology first gains popularity in developed countries before reaching the emerging markets. In the case of mobile banking technology, however, it is the emerging countries that are leading the way.
Europe and the US have an all-time high mobile and internet penetration. But for people in these markets, mobile banking has become no more than a supplement to online banking. By contrast, in emerging countries, even individuals who do not have access to traditional banking channels and the internet have a mobile phone. It is among these people that mobile banking is becoming the preferred banking channel.
Both the mobile industry and the financial sector are aware that using mobile phones to buy goods and services is becoming very popular. Increases to limits by banks and vendors also demonstrate confidence in the suitability of the mobile channel for greater spending. This will generate new revenue channels for high-volume mobile money applications.
As such, one existing application from Mastercard that has generated buzz is the MoneySend application, which is available on iPhone, iPad, Android, and Blackberry; it allows users to send or request money from other individuals. Other applications include Obopay Money, Fidelity, Westpac, Mobile Banking on AT&T, and QIWI Wallet.
The pressure to offer mobile money services on mobile phones is increasing. Besides, the recent testing of mobile payment technologies has enhanced prospects for applications in more areas, with a faster growth in the future. Different stakeholders are working together to make mobile payments a commercial success.
“The banks that will win customer loyalty will be those with the technologies needed to deliver world-class financial services over mobile devices,” explains Noel Gordon, GM director of Accenture’s global banking practice.