EMV is Here: Tips & Tricks You Need to Know

October 7, 2015
/   Insights

The EMV (Europay, MasterCard, Visa) shift went into effect on October 1, 2015 and a majority of large retailers and merchants have upgraded POS terminals to accept EMV chip cards. Despite this new mandate,...

FI Highlight: BankMobile

October 2, 2015
/   Spotlight

Financial institutions that aren’t developing and catering to the wants and needs of younger demographics are missing out on huge opportunities for growth. Luvleen Sidhu, Chief Strategy and Marketing Officer at BankMobile, spoke with...

EMV Liability Shift: Are You Ready?

September 28, 2015

The talking is nearly over for the US payments industry as October 1st sees the all-important EMV liability shift. Chip cards are being issued to consumers and merchants are upgrading their point of sale...

The 5 Most Dangerous Mobile Banking Habits

September 14, 2015
/   Voices

Mobile banking grows more ubiquitous every year. 52 percent of smartphone owners with a bank account use mobile banking, according to the Federal Reserve, and more than half of users log in at least...

The Case for CSR

September 7, 2015

The demise of a New York City law shouldn’t stop good works

FI Highlight: Nusenda Credit Union

September 1, 2015
/   Spotlight

While it is important for banks and credit unions to consider the needs of consumers, it’s also important for FIs to take employee needs into consideration as well. Michelle Dearholt, SVP of Human Resources at Nusenda...

Is a .bank Domain Right for Your Bank?

August 28, 2015
/   Voices

With the general availability of the .bank registry under way, more than 5,500 applications from over 2,200 banks have already taken place, according to fTLD Registry Services.

Can Smartphones Solve ATM Skimming

/   Insights

ATM skimming remains a big business for organized crime rings. According to a recent article in ATMMarketplace.com, card skimming accounted for more than $2 billion in losses. One new approach that banks are exploring...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Hand on mobile phoneWe love cash—literally. We love it so much that we’re willing to eschew the alternatives afforded by modern society. All these millennia into human evolution, and those crinkly, dirty pieces of paper that have passed through countless hands still have a place in our hearts and wallets, and bring a gleam to a mugger’s eye. By contrast, the credit card is so modern, an ultra-fast option that’s both convenient and safe, and helps build a financial history. But it’s not to new either. In fact, the idea goes back to at least 1887, when it gets 11 mentions in the Edward Bellamy novel “Looking Backward.” And today, 127 years later, it’s the only real alternative to the coin of the realm.

Let’s put it another way: Why haven’t mobile payments taken off?

It should be a no-brainer, since we use mobile apps for just about everything else. Apple passed the 1 million figure for the iPhone App store back in October 2013, and devices and apps exist to help us in every facet of our busy lives: shop, communicate, get healthy, get richer, get away on vacation, do our jobs, slack off, play games, and just plain kill time. Mobile banking in multiple forms has revolutionized our industry.

Yet the most fundamental form of human transaction—paying for goods and services in person—still relies on cash and credit cards. We can punch a button on the phone and get it done, more conveniently and a lot more safely. But we don’t.

It’s not as if there hasn’t been any progress. Consumers spent $235.4 billion through mobile payments in 2013. That, according to research from Gartner, represents a hefty jump over the $163.1 billion spent this way the year before. The numbers for 2014 will surely be higher still. However, the numbers are considerably lower for the United States: about $37 billion in 2013, up from $24 billion. And if even that seems big, consider this: The U.S. GDP for 2013 approached $17 trillion.

In other words, the potential for mobile payments is gigantic, and the reality is minuscule. Could it be that the technologies to support such a transformation aren’t here yet? No quite the contrary. In fact, we have a wealth of options available—and that might be the problem.

Remember, we first got to see Google Wallet exactly three years ago this month, and the expectation was that it would revolutionize basic transactions. It didn’t. More recently, we’ve had a steady stream of alternatives, from Square and Clinkle to Belly. Tech vendors and financial services have teamed up to offer joint options, such as Visa’s payWave on coming pre-loaded on Samsung Galaxy phones. Apple will presumably come up with a mobile wallet of its own at some point. Yet so far, the many ripples have not turned into a splash.

The chicken-or-the-egg question is particularly valid here. As recent reports have noted, merchants are wary of making the necessary deals and installing the technology in their stores until there’s enough of a critical mass in the public. But by the same token, most consumers can’t be bothered to download the relevant apps—even when they’re free—and go to the trouble of finding which store accepts which option.

Many other fields face similar compatibility issues, from games to stock trading, yet there’s typically more growth—a slow evolution followed by a spike. In mobile payments, despite the tremendous potential, widespread adoption has been stymied by competitive offerings.

So what’s the answer here? Should we still be waiting for a killer app from a particular vendor? Should the current technology entrants try to get together and create a common platform that enables compatibility but potentially hurts innovation? Should financial services vendors form an agreement of their own and force tech companies to go along? Should the government get involved?

We likely won’t have an answer for a while. But it’s worth noting that the time for the mobile wallet has come, and perhaps will soon be gone.




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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp


Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.