Mobile Wallets Are Scaring Big Banks And For Good Reason
Financial services industry consulting firm Carlisle & Gallagher Consulting Group (CG) recently interviewed 605 U.S. consumers to gather a representative sample of mobile wallet use in the United States and the firm has found that nearly half of consumers in the United States are interested in mobile wallets (48%).
The company also discovered that those consumers would be willing to use mobile wallets as an alternative to their traditional banking account.
A mobile wallet is essentially a connection between your payment details and your smartphone or tablet device where funds are taken from your accounts and then digitally sent for in-store purchases.
Consumers also revealed in the survey that they like mobile wallets because of added perks such as search and shop features, real-time incentives and loyalty programs.
What has bankers worried is not the use of mobile wallets, as many banks are already working on their own versions of mobile wallets, but rather the fact that many of their customers believe they will one day be able to abandon their bank account for a mobile wallet. Eight out of 10 consumers said they would like to use PayPal as their mobile wallet if the company eventually offers regular banking options. Six out of 10 people said Google would also work for their payments and the same number of respondents said Apple would also qualify as an alternative to traditional banking.
It is predicted that within five years half of today’s smartphone users will take advantage of phones and mobile wallets as their preferred form of payment method.
With the physical wallet quickly disappearing banks will need to quickly figure out what they can offer customers that PayPal, Google and other competitors already lack.