Report: Despite Smartphone Penetration, Mobile Banking Lags (Jan. 7, 2013)
Jan. 7, 2013
Financial institutions and mobile wallet vendors will encourage consumers to use mobile payments over the next few years through hybrid solutions intended to bridge the gap between the physical, online and mobile channels, according to a recent report by Javelin Strategy & Research that outlines financial services trends in 2013, as well as how to compete with non-traditional players. What’s more, FIs will combat what Javelin considers consumer indifference to mobile banking by designing features that highlight smartphone capabilities.
“Although the mobile wallet will become an ideal payment mechanism for the physical world, the full transformation is still a few years away,” according to Javelin’s Mary Monahan, executive vice president and research director, mobile. “Just 10 percent of merchants have POS terminals that are ready to accept EMV/contactless payments . . . [And] in 2012, just 9 percent of mobile consumers used a mobile phone to make a payment in a store and 24 percent used a mobile browser, whereas 86 percent made purchases online.”
FIs and mobile wallet vendors will get consumers accustomed to making mobile payments at brick-and-mortar stores through further access to discounts, information and other payment card services via their mobile phones, according to the report. Hybrid solutions helping to bridge the gap between the various retail channels include Bluebird by American Express and Walmart.
The report also indicates that despite the percentage of consumers who own a smartphone, more than 50 percent in 2012, a large percentage of them have not tried mobile banking. Among those who do not use mobile banking, 44 percent cited security concerns, 40 percent don’t see the value and 20 percent balk at the cost of required data access on their wireless plan.
On the mobile device front, Apple and Google will continue to be the main smartphone and tablet players this year; however the demand for Google devices continues to grow, while Apple’s have leveled off, according to the report. As a result, FIs will need to further develop Google‐compatible apps while continuing to educate consumers about mobile malware threats because of Google’s open-source approach with hardware manufacturers and developers, Javelin suggests.
