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Banking and Payments in your mobile phone

Estimated reading time: 3 minutes

Only two years ago, it was very difficult to find solid research that pegged the market space for mobile banking and payments. Now the reports and studies are in the mainstream. Those who have been watching the market know that the time is ripe to go big or go home.

By 2011, the number of mobile phone subscribers that use their phones for mobile banking transactions will exceed 150m globally, according to a new study by Juniper Research, “Mobile Banking Users to Exceed 150m” dated January 14, 2009. They that over 70% of the mobile banking user base will be in the far East, North America and Western Europe.

In their August 2008 report, “Mobile Payment Markets: Digital & Physical Goods 2008 – 20, Juniper forecast the gross transaction value of payments made via mobile phone for digital goods and physical goods to exceed $300 billion within next 5 years. Global annual gross transaction value will grow over 5 times by 2013. (retailers take note!)

payment smartphone

The assessment from Juniper? “There is a significant and immediate opportunity, by 2013, for mobile payment services, systems, software and supporting services “ to go along with this value of payment transactions.

In their Mobile Payment Markets” series, Juniper predicts a heaping bowl full of opportunity for the entire supply web for m-commerce, using NFC (Near Field Communications) — including mobile payment services, chips, phones and supporting services. They predict that the Mobile Payments Market will hit its tipping point in the window between 2011 to 2013. Is North America ready?

There’s no question that Southeast Asia often leads the way when it comes to early and widespread adoption of advanced technologies like smart-chip mobile banking, in use inSouth Korea for several years now. Smart-chip mobile banking is definitely the most current, secure and powerful technology on the evolutionary path of mobile banking, after SMS/text-based banking.

In South Korea, people are using their cell phones in ways that North Americans haven’t seen yet, and mobile banking methods are a going to be a part of the excitement of bringing North Americainto the limelight. Is smart-chip banking coming soon to a North American market near you?

Smart-chip banking is by far the most secure and versatile method and financial institutions who are serious about security and multiple use (i.e. payments and banking) will soon be looking to smart chips in phones for both banking and payments. Just as the financial institutions did in Korea 5 years ago, North American financial institutions are first entering into the mobile banking space with WAP or SMS/text and other such methods for mobile banking. All good, but smart chips are better.

Getting ahead of the curve means moving beyond and being bold, even in times of difficulty. Although market activity may be volatile as the global financial woes take their toll, the opportunity is tremendous to hunker down, do the homework, incorporate the technology into your existing architecture, and come out on top at the other end of the recession.

It only takes one security breach to lose your reputation in the financial world. Secure smart chip-based mobile commerce is the most effective way to hedge your bets against such a fatal event, and show your customers that you want to protect their assets to the best of your ability.  It’s a win-win.