Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.
Archive Archive

Mobile-Minded Consumers Ready to Dump Traditional Banks

Three out of four Americans (73 percent) say they use less cash today than 10 years ago. Credit: Digital dollar sign image via Shutterstock

There’s more bad news for the beleaguered banking industry, and it has nothing to do with regulatory scrutiny or shareholder displeasure: Consumers who are interested in mobile wallets would consider using alternative players to their primary bank for both mobile wallets and banking.

Mobile wallets are smartphones or tablet apps that store a consumer’s payment details on their devices or online to fund digital and in-store purchases.

And nearly half of the nation (48 percent) is interested in a mobile wallet, based on a representative sample of 605 U.S. consumers conducted by Carlisle & Gallagher Consulting Group (CG), a financial services industry consulting firm. These consumers also expressed a strong interest in using a wide variety of services in their mobile wallets, such as search and shop, loyalty programs and real-time incentives.

[More Americans Favor a Cashless Society]

Seventy-six percent of these consumers already use or intend to use mobile banking.

Interest in mobile wallets per se is not what is making big banks quake in their boots; a host of traditional banks are exploring offering mobile wallets. What is troubling is the willingness of consumers go outside the traditional banking establishment for making payments. Eight in 10 consumers interested in mobile wallets said they would use PayPal as their mobile wallet provider and would consider the service for other banking services if they were available. Six in 10 said they would use Google, and the same number would consider using Apple.

"The competitive threat from new entrants is real," said Peter Olynick, CG’s Card & Payments Practice Leader. "Consumers are open to considering alternatives to their primary banks to provide mobile wallets and even core banking services. People have already slowed their use of cash and checks in favor of credit and debit cards. Within five years, half of today’s smartphone users will be using their phones and mobile wallets as their preferred method for payments. These customers will be using better tools to help them optimize transaction choices. Banks need to proactively consider how their products will stay 'top of wallet' in the new mobile wallet world."

Reach BusinessNewsDaily senior writer Ned Smith at Follow him on Twitter @nedbsmith.

Ned Smith

Ned was senior writer at Sweeney Vesty, an international consulting firm, and was Vice President of communications for iQuest Analytics. Before that, he has been a web editor and managed the Internet and intranet sites for Citizens Communications. He began his journalism career as a police reporter with the Roanoke (Va.) Times, and was managing editor of American Way magazine and senior editor of Us. He was a Captain in the U.S. Air Force and held a masters in journalism from the University of Arizona.