What are the benefits to mobile banking and mobile wallet, as well as their downsides?
It’s easy to confuse a mobile wallet app with mobile banking: both are apps stored on smartphones. There are huge differences between the two, however, from their uses to their limitations. We’ve detailed the pros and cons of each.
Mobile banking explained
Mobile banking puts most of the services you’d access in a physical bank right at your fingertips via a smartphone app. Most banks have improved accessibility and convenience by creating apps that allow their customers to carry out simple and complex tasks on the spot, from depositing cheques and transferring money to contacts to paying for goods and services or locating a nearby ATM.
First and foremost, mobile banking is incredibly convenient. Tasks that would have taken a significant amount of time and effort, and perhaps even required a physical appointment at the bank, can now be carried out instantly from a mobile phone.
Secondly, it’s a means of communication between the bank and the customer. An active app on a smartphone allows the bank to push notifications to the user regarding fraud or user activity, giving customers more insight into activity occurring in real-time.
It’s easy to assume we can now bank from anywhere on earth, but unless the WiFi connection is a trusted one, even logging in to quickly check your bank balance is a no-go. Users must always ensure they have a secure connection before using a mobile banking app, which can be difficult when you’re travelling or away from home.
The bank’s app will have been designed to offer as many functions as possible, however, it’s likely that the range of capabilities will be somewhat limited to banking in person.
Mobile wallets explained
A mobile wallet is also an app stored on a smartphone. The difference is, this one allows the user to choose which credit cards, debit cards, coupons and rewards cards they would like to securely store. Once it’s been loaded up with information, the user can make in-store payments, transfers and more, and the related payment card information will never leave their smartphone.
Depending on the mobile wallet you choose to download, you may have the option of going completely wallet-free for the foreseeable future. Some mobile wallet apps give users the option of storing their driver’s license, loyalty cards, boarding passes, coupons, and more.
Security is a huge pro for mobile wallets, as smartphones have so many inbuilt security barriers that can’t be bypassed. Face ID and fingerprints are commonly used to unlock a smartphone, so if it is lost or stolen, it’s unlikely the mobile wallet will be compromised.
Mobile wallets also cut down on time spent waiting for transactions to be processed at check-out points in stores, increasing the convenience for the user.
One of the downsides of using a mobile wallet is that it’s so convenient, some users report finding it difficult to keep track of their spending. The fact that no money physically changes hands between the merchant and consumer removes the psychological link of spending money, therefore the consumer might not weigh up a purchase with the same gravity.