Bankers are heralding mobile banking as the future of the payments industry. However, a recent survey carried out by the Federal Reserve discovered that consumers are not so taken by mobile banking, with only 10% using mobile devices for banking purposes.
The study, which was carried out by the Boston branch of the Federal Reserve, showed that more than 65% of American consumers use online banking when it comes time to manger their account and to pay bills.
Only 10% used Smart phones and mobile devices to do so. People have also been generally slower to start using mobile banking than they were to try out internet banking. Only 3% of those who responded to the survey had ever completed a payment using a mobile device.
Joanna Stavins, Senior Economist and Policy Advisor at the Federal Reserve’s Consumer Payments Research Center said,
People may be satisfied with the payment instruments and methods they now have, and they don’t see a lot of value in adding mobile payment to the mix. Concerns about security might be on their minds as well.
Bankers are backing mobile banking because it requires fewer employees to process electronic payments and transactions than would be required to do so in branches or by paper check. Banks also feel that mobile banking can raise brand awareness because their customers are carrying a mobile version of the bank around everywhere they go. In a recent study, 54% of bank executives rated developing mobile banking services as their top or very important priority.
However, customers don’t seem concerned about bankers’ proprieties or preferences. The most common way to access banking services continues to be actually visiting the bank in person and dealing with human beings. Branch visits account for over 77% of all consumer interactions with their bank.
ATM transactions were the next most popular at 69%. In a similar vein, while smartphones are being heavily pushed as the replacements to traditional credit cards, if consumers have anything to do with it they will not be replacing plastic any time soon.
Many consumers feel that smartphone payments are not going to be as convenient as their developers are leading us to believe. With many of the payment apps having a fairly complex procedure, sometimes even involving saying your name at the checkout counter, impulse buyers are going to find it quicker and easier to use cash or regular credit and debit cards.
If you add the increasing security concerns that the average consumer has, Smart phones will have a long way to go before they replace credit cards as the preferred payment method.
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