If you haven’t paid for a latte using your smartphone, you’ve at least seen someone do this while waiting for your turn at the till. By far the most popular application of the mobile wallet, digital payments give us only a small glimpse at its full potential.
As FinTech startups build greater relationships with larger financial organizations, innovative apps changing the mobile wallet are becoming more popular with every year that passes. With choice comes responsibility — the apps you choose to download will affect your financial reach online. Download the right ones, and you’ll create a robust mobile wallet that will help you at every financial step.
Digital payments could spell the end of cash if widespread adoption of NFC chips hit the US. NFC stands for Near-Field Communication, which is the tech that communicates financial information wirelessly from a smartphone to a retailer’s POS unit. NFC chips allow for any contactless payment technology, including debit and credit cards that allow tap and pay. Though many developed countries have embraced contactless payments, the US is slow to retrofit ATMs and POS systems to support this new tech.
Despite the country’s reticence to adopt digital payments, some of the biggest retailers are campaigning for cash-free transactions. Walmart, Amazon, and even Starbucks offer contact less payment methods at their stores. Consumers can download Apple Pay, Google Pay, and Samsung Pay to sync their banking information to their phones, so they can make these payments at participating stores.
The country’s biggest banks offer online banking, so their customers can link to their digital payment app of choice. However, millions of Americans are what financial advisors call the under served. They don’t have access to these accounts because unfair restrictions make it impossible for them to meet the bank’s requirements. Things like minimum balances and monthly fees force these Americans to rely primarily on cash, using it to pay for rent, bills, and other purchases.
A new fleet of mobile banking app that includes Bank X offer free checking accounts with no minimum balances. These accounts work just like traditional bank accounts when syncing with Apple or Google Pay, giving these cash-reliant Americans a chance to make digital payments.
While only a handful of stores are cash-free today, economists forecast cashless markets will grow in popularity. Without a mobile bank in their wallet, the under served could find it hard to participate in these new markets, making mobile banks a necessity for the under served soon.
The same people excluded from traditional banks accounts will have trouble finding financial assistance when facing personal emergencies. They’re joined by credit poor or credit thin individuals whose financial histories preclude them from getting a personal loan or line of credit.
The role of the mobile wallet is expanding to include companies offering convenient, hassle-free online loans. They’ve removed many of the barriers that prevent Americans from getting these loans, and, in cases like MoneyKey, they’ve made it possible to apply and repay these cash advances from a smartphone.
Traditional financial services are alienating many of their potential customers, as a growing number of people don’t trust them with their financial health. As a result, they’re turning to FinTech alternatives that provide similar services but on a more convenient, digital platform.Rather than trusting financial advisors and stockbrokers to help them develop a portfolio, consumers are turning to a new wave of online investing apps and robo-advisors like Wealth simpl and Robinhood.
The mobile wallet isn’t just a digital substitute for a billfold. As FinTech alternatives grow in size and scope, the mobile wallet will evolve to include a variety of financial services. Your task is filling your mobile wallet with the right apps, so you can bank, borrow, and invest with confidence.