Mobile Banking Use Rises as Mobile Wallet Use Falls

August 25, 2016         By: Steven Anderson

A strange new dichotomy may have opened up in the field of mobile payments as an unlikely gain took place alongside an unlikely decline.

A recent study from Clarabridge showed us the unexpected figures of a mobile market where some unexpected developments are taking place, as mobile banking use is on the rise, but mobile wallet purchases are falling.

The numbers tell the story: 36 percent of adults surveyed hadn’t been to a bank branch in the last 30 days, and for most, the main reason to do so is to make a deposit. This means, in turn, that the respondents must be making those deposits some other way, and for many, that way is via mobile device.

The study also showed that 38 percent of consumers interact with a bank primarily by mobile device, though 35 percent have used a laptop or desktop as well. Around 63 percent have used phones to carry out a standard banking task, which puts these methods well ahead of physically entering a bank branch.

It’s also been shown that customers prefer bank-branded apps to the comparable third-party apps, and 61 percent of customers have downloaded the bank app.

Yet even as banks are on the rise, mobile wallets are having trouble catching on. Those surveyed are using these more often, but not as often as payment platforms really need.

A study from Javelin Strategy and Research found monthly consumer adoption up to 21 percent, nearly double what it was three years ago at 11 percent, but with monthly frequency down to an average of three transactions a month, there’s a problem.

Some success stories are clear, like Starbucks and others, but these are often functions of stores combining mobile payments with reward functions. The decline in use certainly isn’t good news, but there is hope.

Knowing what we know about how small businesses are increasingly turning to mobile payments as a way to adapt to the Europay / Mastercard / Visa (EMV) mess, there’s some clear potential gains ahead.

If mobile wallets want to see the same level of gains mobile banking is enjoying, the basic issues like security need to be addressed.

Almost as important is the number of places where mobile wallets can be used, and once that’s shored up, there will likely be many more customers turning to mobile wallet systems.