ePayments Week: More Androids banking

More people are banking with Android devices, though some don't trust mobile banking at all.

Here’s what caught my attention in the payment space this week.

More Androids banking

Android logo As the number of Android users swells past the number of iPhone users, it should come as no surprise that as of December, 2010, there’s more mobile banking on Android than on iPhones. However, Carlo Cardilli suggests that could change as the number of Verizon iPhones grows and those users take up mobile banking.

A recent Forrester survey says 12% of the US online population banks on their phones, up from 5% two years ago. Forrester says that’s about 10 million users, and predicts that will grow to 50 million by 2015. That growth seems reasonable, given that users who discover mobile banking tend to, over time, use it more as they get used to it, especially for simple transactions like checking balances and transferring funds between accounts. Still, Penny Crosman with Bank Systems & Technology notes that 35% of online users shy away from mobile banking because they worry it’s not safe and 24% don’t see the point and would just as soon wait until they reach the ATM.

Discomfort with the mobile wallet

Speaking of people who are wary of mobile transactions, remember all that stuff we’ve been reading about mobile payments being a disruptive technology that catapults new players into the driver’s seat and leaves old-school players in the dust? Well, turns out not everyone is all that excited about handing over the keys to the kids. What’s more, they’re not even sure they want to get in the car with them. A new survey by UK researchers Vision Critical finds a majority of Britons “uncomfortable” with the idea of using their phones for mobile payments. The survey found women more skeptical, while men and people already poking around on smart phones were more open to the mobile wallet concept.

Perhaps most significantly (and interesting) was that those surveyed trusted banks more than telecom carriers, credit card issuers, or handset manufacturers to handle the transactions. “Banks could play a strong role here,” said Mike Stevens, Vision Critical’s head of research in London, in an interview with Sarah Clark at Near Field Communications World. “They are generally more trusted by their customers than other players in the mobile payments game.” It’s a striking vote of confidence for the banks whose credibility had seemed to suffer in the wake of the financial crisis, and perhaps an affirmation that however much we dislike our banks, we like our telcos even less.

Square simplifies

SquareSquare founder Jack Dorsey tweeted the news Tuesday that the mobile payment service would drop its transaction fee (15 cents) on purchases and collect only the 2.75 cut. @Jack followed that with a retweet from @stevecheney: “A merchant doing 500 transactions a day just saved over $27K a year with @square. Remarkably impressive.”

Kat Aharya at Mobiledia wrapped some nice context around the move, noting that it fits nicely with Square’s goal of simplifying the whole process of collecting payments on credit cards, especially for small merchants. From the cute dongle that plugs in to a smartphone’s audio jack to the straight 2.75% cut (compared to merchant vendor accounts, which have variable rates depending on transaction amounts and volume), the Square sells itself as the simple and straightforward alternative for the forward-looking merchant crowd.

Few remembered that the fee was an experiment, but Kevin Woodward at ISO & Agent offered a reminded that Square had added the fee just last April and was now reverting to its earlier payment structure. I guess that explains how Square already had a smooth promotional video ready to roll.

Got news?

News tips and suggestions are always welcome, so please send them along.

If you’re interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O’Reilly and PayPal.


tags: , , ,
  • The phrase is “just as soon wait”, not “just assume wait”.

  • David Sims

    Of course it is — hazards of typing too fast. Thanks, Kyle.

  • Mobile banking hasn’t really taken off in the UK yet. Consumer confidence in the banking system has remained low following the finacial crisis and the Coalition Governments failure to follow through on the promised banking reforms has done nothing to repair the damage. Online banking is not as well developed as perhaps it should be either.

  • Meghan Nicole

    I’ve been using my iPhone for mobile transactions and love how easy it is. I’ve also been recently using this new service PayDivvy, https://www.paydivvy.com/ that makes it easier to manage social expenses with friends. No more chasing people around when they owe me back. I love it because of how simple it’s made handling social finances.

  • carrie

    There is a typo in this article. The Forrester forecast is through 2015, not 2050

  • David Sims

    Tracey, that’s the attitude I had expected to be revealed in the survey: lasting suspicion of the banks given their role in the crisis, but wondered if that was already forgotten. (Certainly Barclay’s CEO Bob Diamond’s performance a few weeks back, explaining to MPs that the time was over for banks to apologise, suggests some want it to be.) So I was surprised to see their credibility apparently ranked higher than the other groups. I would think mobile oweners would have a fonder impression of the handset makers (Apple, HTC), but maybe it’s rather that they’re not trusted to handle finances.

    Kyle & Meghan, thanks for filling in as crowd-sourced copyeditors this week.

  • Barclays was one of the few UK banks that wasn’t bailed out by the taxpayer, so public anger is mainly directed towards the likes of Lloyds Banking Group and Northern Rock.

    The banks have continued to take a bashing following the aftermath of the banking crash as more truths are about their improper practices are uncovered. The latest being the mis sold mortgage scandal where millions of borrowers have been pushed into taking out mortgages that were not appropriate. Lloyds has recently put aside £500m as financial redress for those that have been affected but this is only the tip of the iceberg.

  • ePayments are huge! http://www.Roomeo.com is great for handling expenses in shared households!