Visa executive predicts mobile banking will expand

Mobile banking has become very important to the financial lives of millions of people around the world, and this type of technology is expected to be used for a growing number of services in the near future.

Speaking at a major technology conference, John Partridge, the president of Visa, the world’s largest processor of debit and credit card payments, said that it’s important for financial institutions to start using new technologies to develop better relationships with their customers, according to a report from Mobile Business Briefing. Already, these technologies are moving into widespread use, and the sooner financial giants work to increase ease of use and provide greater assurances of account security when using them, the better off both companies and consumers alike will be.

Partridge noted that mobile wallet technology will likely become a reality at some point this year, at least in the more technologically developed nations of the world, such as the U.S., Canada, Europe, Singapore and Malaysia, the report said. But this will be contingent on mobile wallet platform developers’ ability to promote the use of near-field communications technology to consumers as being both safe and convenient.

“After some false starts, NFC technology has been adopted as the global technology standard for transforming mobile phones into payment devices, and allows consumers to wave their smartphones over a payment terminal in order to make a purchase,” Partridge said, according to the site. “NFC is aligned and interoperable with the global payment industry standard for chip payment cards. This is a critical step.”

What hurdles remain to widespread adoption?

Currently, experts note that there are two major obstacles standing between NFC technology and everyday use. The first is that many consumers may be unsure of the security of this technology and therefore are unlikely to trust it with their sensitive account data. However, in most cases, NFC technology is actually more secure than traditional credit cards because of the way the new systems store and encrypt card information, such as by only making it accessible after a user has entered a password. Meanwhile, the magnetic strip technology that is currently used on nearly all credit cards issued within the U.S. is largely unsecure, easy to duplicate, and several decades old.

The other issue NFC payment platform developers may face is that currently, few smartphones on the market contain the technology necessary to complete this type of transaction. That, however, is expected to change within the next year or so as more mobile developers issue phones with this technology built in.

In recent years, consumers, even those who do not implicitly trust technology, and those who don’t have traditional bank accounts, have adopted some form of mobile banking to manage their funds. And once they do, they are far more likely to use it regularly going forward. It’s expected that once consumers adopt this new technology, even in small amounts, it will become incredibly popular within a relatively short period of time.

Posted in Finance
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