Mobile banking is on the verge of cashing in!
3 min read
07 November 2013
Amongst working adults 26 per cent are using their phones for some form of financial or banking transaction, with 16 per cent intending to try mobile banking.
But it is those without bank accounts, ironically, that are fuelling the growth of mobile payments – a higher percentage than those with bank accounts, according to BuzzCity research.
Of those who are already mobile banking, balance enquiries, bank transfers and cash withdrawals, are the top three most-used banking features. When it comes to non-banking activities, 13 per cent now use their phones to receive their salaries, and 12 per cent pay for goods via their phones.
The under-banked leads growth in mobile payments
The research has brought to the fore the emerging demographic group of the under-banked – those who do not have traditional bank accounts – who make up 30 per cent of working adults using mobile.
The under-banked are connected, with exposure to mobile financial services and this is fuelling the growth of mobile payments: 19 per cent use mobile payments for paying bills compared to the 13 per cent who use traditional bank accounts. Mobile is bridging the gap for those with no access to traditional banking services – some 12 per cent use mobile money transfer services.
The under-banked are not necessarily a high credit risk group. While many believe they don’t have enough money to open an account, only eight per cent have a bad credit history. At least a fifth feel they do not need a bank account because banks do not offer services that are important to them, such as fast cheque cashing services and small cash loans.
Cash is king, but mobile is flourishing
When it comes to everyday purchases, cash is still king but 16 per cent now regularly use mobile payments, fast closing the gap on debit and credit cards (23 per cent). In such a short space of time, mobile payments are becoming the norm.
Dr KF Lai, CEO of BuzzCity, said: “A seismic shift in global consumer confidence is dawning on mobile banking, including how and what people are using mobile payments for. Mobiles are intrinsically wedded to our daily lives and this now extends to how we bank, whether we are with or without a traditional bank account – and what we are happy to pay for with via our mobiles.
“For the under-banked the mobile phone has become, in addition to a communication and surfing device, a necessary banking and payment channel and is filling a gap that the banks cannot meet.”
The future is mobile
The rise of mobile payments is clearly being fuelled by the under-banked, but the next phase of growth for mobile banking and payments will be among those with bank accounts who are not yet using their mobiles for banking. It is apparent that further education among potential mobile bankers will need to be implemented across the board to reassure them of the security and safety aspects and emphasise the availability, and convenience of third party transactions.