Blog

Traditional banks see added competition from mobile payment systems

June 8, 2012

The increased popularity of mobile credit card payments has threatened brick-and-mortar banks, as fewer people need to go to physical locations to complete transactions.

The increased popularity of mobile credit card payments has threatened brick-and-mortar banks, as fewer people need to go to physical locations to complete transactions.

A survey by Carlisle and Gallagher, a consulting firm, found that eight out of 10 respondents said they would be willing to use Apple, Google or PayPal for banking needs. In addition, almost half of the 605 people asked said they were interested in obtaining a mobile wallet using smartphones, PC World reports. Forty-five percent said that they would choose PayPal for merchant services, the most popular of all firms. A quarter said that they would use Google’s mobile system instead of a traditional bank.

Industry analysts said that major financial brands needed to make the right arrangements to avoid getting left behind by new technology.

“Financial institutions risk ending up as back-end funding sources for mobile wallets and payment products owned by other brands, who operate the front-end, consumer-facing aspects of the interaction and transactions,” Peter Wannemacher, an analyst at Forrester Research, told the source.

There are many signals that the payment industry is shifting toward mobile. Chetan Sharma Consulting’s 2012 Mobile Industry Prediction found that more people would be adopting the system than in previous years.

Back To Blog