“Although this integration may not necessarily bring instant success for mobile payments, it does offer some indication as to how mobile payments are evolving,” said Rajesh Sharma, VP Mobile Banking & Payment Apps at INSIDE Secure. “In the midst of all this mobile-banking hoopla, some of the banks are contemplating whether they have to participate in third-party wallets such as Apple Pay, Android Pay, Samsung Pay and CurrentC.”
When it comes to functionality, both options provide very similar features for consumers. The majority of mobile banking and payments applications allow individuals to engage in P2P transactions and mobile bill integration. However, third-party apps still rely on bank accounts for their core services. Without a credit or checking account, for example, users would not be able to pay with their smartphone in retail shops.
Security presents several issues for groups that are considering a collaboration with an outside provider. To put things into perspective, establishments that take this route would not have full control over the protection of customer data. Consumer privacy also becomes a problem when digital wallets peek into transaction information for the calculation of their services.
But if the institution is comfortable with the terms and conditions of the partnership, then the service could be advantageous and highly profitable in the long term.
“Besides payments, the integrated wallet app can offer more valuable features that help consumers to monitor their financial position by accessing their balance and transaction history as well as manage their spending, including real-time notifications for all transactions and instant rewards redemption options,” explained Sharma.