The trend toward using your mobile phone in place of a credit card continues to accelerate. Next month, Bank of America, the nation’s largest consumer bank, will begin a test program that lets customers use smartphones to pay for store purchases.
The program, which will run in the New York region through December, is the latest step in giving consumers a "digital wallet" smartphone option. Here’s how it works: A small radio chip is installed in your phone and coded with your bank account and password. You then “bump” the phone with a scanner at checkout and the sale amount is transferred from your account.
BoA’s move is the latest in the race to develop smartphone payment systems. The banks are moving quickly in this area, but so are companies outside the banking industry. As Reuters notes, “Competition is increasing from outside the banking world.”
Mobile phones have already replaced the wristwatch for many college students and it seems only a matter of time – and not much at that – before it replaces the wallet too.
With your mobile phone, you can take care of banking, pay for parking, board a plane and stream old Saved by the Bell episodes. (OK, three out of four ain't bad.)
Until recently at least, conventional wisdom held that short and light content would be most popular on the mobile screen. But consumer tastes have a way of confounding conventional wisdom, at least according to an interesting article in MediaWatch.
According to Nielsen figures, longer drama programs are turning out to be the most popular mobile videos. That includes CSI, Heroes, and Lipstick Jungle. In a nod to the mobile lifestyle, CBS is also making viewing easier by dividing shows into shorter streams - a typical CSI episode has six or seven individual streams that allow viewers to pick up exactly where they left off earlier in the day.
Nielsen estimates that only about five percent of mobile users access video. But when you look at how quickly other apps like banking are taking off, it won't be long before CSI overtakes crosswords as the most popular pastime during the morning commute.
So how fast are American cell phone users adopting mobile banking?
Let's put it this way: If all the mobile bankers in the U.S. were a city, in 2007, they would've been about the size of Tulsa. Last year, they would have grown to the size of Chicago. By this year, they'll surpass Los Angeles and almost reach the level of New York City.
In short, seven million cell phone users will be mobile banking customers this year, according to ABI Research, a 1,600 percent increase over 2007. As The Wall Street Journal documents, the reasons are pretty obvious: ease of access, greater consumer confidence in the system and more banks racing to offer the service.
Next up according to Citibank: Mobile phones will replace your credit cards. Stay tuned.
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Tags: Consumer Benefits, Mobile Applications, m-commerce, Mobile Banking, Mobile Phone, Smartphone