For a while it looked as though Google Wallet was going to take the world by storm. At least, last year many an expert predicted as much. This year, they are predicting instead that the likes of banks, Visa and Paypal will grab and run with that ball.
In Gigaom.com, Kevin Fitchard writes, “Google and the carriers had their chance. Now it’s the banks’ turn.” He bases his prediction in part on a question Cheaton Sarma Consulting recently put to selected mobile industry leaders: “Who will define the mobile payment/commerce space?” Nearly 40 percent selected the answer, “Financial guys, e.g., Visa.” Less than 15 percent voted for Google, and only about 3 percent chose Apple.
I draw a couple of insights from survey results like that, one of them being that predicting the future is tantamount to setting yourself up to be inevitably wrong. The future has a habit of making hairpin turns even that even experts are powerless to foresee.
This is especially true for high-tech industries, which evolve blazingly fast. Not long ago, no one would have predicted that Apple Computer would one day drop “Computer” from its name, much less turn the music, publishing, banking, photography and other industries upside-down by introducing—of all things—a phone. Or that, given its late start, the Android platform would have an iota of a chance in catching up, much less giving Apple a run for its money. Or that, speaking of late starts, old-tech Visa might stage a comeback and threaten to retake the reins of the electronic point-of-purchase future after all.
In that spirit, here is my other insight for mobile payments: Regardless of predictions, it’s decision time for banks. As Amir Tabakovic from BAI states, “Whether they fly solo or with partners, financial institutions need to begin placing their bets in the mobile wallet game.”
More financial institutions are beefing up their mobile channels to provide more variety and convenience to existing customers and boost customer acquisition figures. However, some industry analysts say that this strategy may backfire and only quicken the pace at which brick-and-mortar banks become less utilized by consumers.
Analysts say there are several features – ranging from basic to more complex – offered by mobile apps that make the need to visit a branch less pressing. For example, many apps provide financial assistance programs that allow users to balance their checkbooks, monitor their balances and establish a budget. These actions were previously accomplished in a branch or online, but now individuals have the flexibility to manage their finances on the run, according to the Huffington Post.
There are also now several types of financial transactions eliminate the need to visit a branch or an ATM in a financial institution’s network. For example, consumers can check balances, transfer funds and deposit checks via their smartphones. While remote check capture is still in the development stages, many consumers who are shopping for a new bank are factoring this option into their decisions.
Many industry professionals have dismissed claims that mobile technology will altogether replace banks in the future. Consumers may continue to need brick-and-mortar facilities to apply for mortgages, withdraw cash, make cash deposits and open an account with a financial institution. While studies show that the U.S. is becoming a more cashless society, few experts are confident that cash will ever truly be replaced as millions of Americans are hesitant to jump on the mobile banking bandwagon. However, recent reports from national institutions, such as Bank of America, reveal that many banks are scaling back services and employing more automated systems.