Payback time: eBanking and mobile payments in the USA

Last updated: 30 September 2015

If you’re an avid reader of the Gemalto blog, it won’t surprise you to learn that digital commerce and eBanking adoption has risen significantly in the past few years, across the globe, from Turkey to Brazil. So how about the US? Well last year alone, the American Bankers Association found that some 62% of US adults preferred to bank online rather than via ATMs or in branches – an increase of 36% on the previous year.

Mobile banking is already popular: Bank of America reports that ten million of its customers use their cellphones to access their accounts and financial products, an increase of three million users in just one year.  But we’re only just scratching the surface of what it can do. Right now, most mobile apps focus on showing the balance of your checking account or finding the nearest ATM, but smartphones are capable of much more.

Chase’s QuickPay app, for example, enables cellphone users to send money to any phone number, even if the recipient doesn’t bank with Chase. After a shaky start, they’re now doing more to make people aware of the benefits. Similarly, PayPal’s instant global money transfers are all now possible on the PayPal app.

If you think using your phone to manage your money is convenient, it’s really just the start. With NFC technology, users can connect to another NFC-enabled device or reader in order to transmit data over a highly secure, short range network. In a country obsessed with mobile phones, this is the future of payments and like EMV; the US is ready for it now. We are also working with Isis to deploy NFC services in the US so watch this space.

There are two big challenges for mobile payments: support and security. Google Wallet has done well with the former, now backed by Barclaycard US, and when it comes to security, card details are being scrambled so neither the merchant nor your cellphone ever shows the unencrypted data. Likewise, it’s easy to disable an NFC-enabled phone remotely if it it’s stolen, and since the largest transactions permitted via NFC tend to be less than $20, advocates argue that it’s less risky than carrying cash in your wallet.

With mobile money, the trick is to balance security with convenience. Safer than Fort Knox and easy as pie: with nearly 80 million NFC-enabled phones predicted to be sold this year, if apps can deliver this mantra, digital dollars will be big business indeed. (And if you’d like to follow our very own NFC challenge being run in London, follow us on Twitter for updates as two bloggers compete to achieve all NFC tasks set by us.)