The rise of mobile payments has been gradually brewing in the global banking market for several years. Now, experts are predicting that 2015 will be the year mobile payments overhauls the banking sector, due, in part, to the tens of millions of U.S. citizens without banks.
Analysis from re/code released last September found that an estimated 68 million citizens in the U.S., and 2.5 billion across the globe, do not use a bank. Those are the consumers who will propel mobile banking in 2015, experts say, as the underbanked seek easier ways to shop online and pay for products.
Walter Isaacson, chief executive of the nonprofit Aspen Institute, discussed the impact of a lack of banking options for millions of consumers on the mobile payments industry. “It takes four days to move money sometimes if it’s just an average person [trying] to use things like checks and credit cards that have transaction costs,” he said. “Those inefficiencies will spur the continued rise of mobile payments and digital currencies, which will eventually disrupt the banking sector.”
In other words, mobile payments can solve problems posed to consumers by traditional banking services, and innovations in the market will likely eventually change how everyone moves cash.
In fact, research suggests that the disruption of the banking status quo has already been underway for quite some time. The Federal Reserve released a study in March 2012 that found one out of five U.S. consumers use their smartphones to access bank, credit card or other financial accounts. An additional 20 percent predicted they would use a mobile banking system at some point in the future.
Altogether, Issacson said the research suggests that the market climate has been leading up to a paradigm shift, a change likely to spill over in 2015 thanks to the rise in mobile payments technologies. “Globally, once you open up the market to the next billion people coming online who can make cellphone text payments and that sort of thing, I think it changes the economy quite radically,” he said.