When you own a small business with limited resources and a longer list of “to dos” than available manpower, keeping up with the latest in banking technology may seem like a low priority. But in reality, mobile banking has a significant impact on your business’s costs, cash flow, and ability to attract, serve, and retain customers now and in the future. Here’s a look at why mobile banking is the future and how its continued evolution will impact your business.
Related Article: 5 Ways to Cut the Cost of Business Banking
Mandated changes to credit card technology will impact point of sale transactions.
Financial institutions and credit card issuers must reissue magnetic stripe credit and debit cards with a replacement card that utilizes EMV smartchip technology by October 2015. Though the change was mandated as an alternative to magnetic swipe cards to better protect sensitive consumer data in payment transactions, the cost of card reissuance and NFC terminals will slow the transition, to some degree.
By the end of 2015, Aite Group estimates that 70 percent of credit cards and 40 percent of debit cards in the U.S. will be reissued to include EMV chip technology; Berg Insight forecasts that by 2017, 86 percent of POS terminals in North America will accept NFC payments. Once consumers become accustomed to the idea of EMV and “tap to pay” processes, Berg Insights predicts that mobile payments (which experts at Pymnts.com say present a faster transaction than EMV technology) will increase as well, reaching a transaction volume of $44 billion by 2017.
Consumers will begin to expect the ability to pay with a mobile device.
According to data collected by Cellum Group, 41 percent of iPhone users have used their mobile device to conduct at least one mobile payment transaction. Apple’s recent introduction of its mobile wallet ApplePay and its relationship with more than 200,000 retailers and financial institutions will help to streamline the convenience and ease of use that has historically lacked in the mobile-wallet space.
Regardless of whether you integrate ApplePay specifically into your business model or opt for an alternative mobile-payment processor geared more toward the needs of a small business, experts at Juniper Research predict that ApplePay’s prevalence will create a “halo effect” that will make mobile payments the preferred currency of sorts.
Related Article: Guide to Accepting Apple Pay at Your Business
Security concerns will shift preferences toward mobile banking.
As consumers repeatedly hear of large-scale data breaches at popular corporations and leading financial institutions, concerns about payment technology and transaction security will heighten. According to a research report from Aite Group, the mobile environment offers more robust security against cybercriminals, and “traditional” identity thieves than online channels.
As a result, it predicts that financial institutions and merchants will become more aggressive about integrating mobile apps into sales channels, and incentivizing consumers to leverage the higher-transaction security that mobile offers. As a small business, you can offer consumers the same level of protection by processing mobile payments through a secure payment processor, and/or incorporating such a processor’s environment into your business’s own native app.
Mobile banking provides cost efficiency for small businesses.
Mobile banking is a cost efficient way for small businesses to manage daily finances, process transactions and grow business. As The New York Post recently reported, it’s a win-win for financial institutions and business owners. Not only do small-business owners who use mobile banking have more money in their accounts, they use more of their financial institution’s products and services. When small-business owners deposit checks using a mobile device and app, in tandem with processing customer payments via a mobile payment processor, they expedite access to cash flow, while eliminating the cost and inefficiency associated with traditional paper-based banking processes.
Mobile banking has even simplified the process of finding small-business funding -- in a Fox Business article, Rohit Arora, co-founder and CEO of an online lending resource says that mobile small-business loan applications have risen from 25 percent to about 40 percent today in just a year.