Banks Dialing Up Mobile Services

New technology continues to be rolled out to make banking more convenient than ever. 

According to Federal Reserve research data, 53 percent of smartphone owners with a bank account have used mobile banking. Over 17 million customers at Wells Fargo alone use mobile banking, making it the fastest-growing channel in the company’s history.

Wells Fargo also announced plans for a mobile wallet that will integrate the bank’s debit and credit cards with its existing mobile apps for Android users. By the end of summer, customers will be able to make in-store purchases by tapping an Android phone at payment terminals worldwide. 

Eventually, Wells Fargo Wallet will enable customers to use an ATM without a debit or ATM card, although the bank says less than half of its ATMs will be enabled for this feature by the end of the year.

Bank of America was the first to introduce this cardless feature at the bank’s ATMs, which requires a simple tap on the ATM screen. The company expects its cardless technology to be available at 5,000 Bank of America ATMs by year-end, with beta tests already established in a handful of large metropolitan areas (Boston, Charlotte, New York City, San Francisco and Silicon Valley).

Javelin Research reports that 29 million more U.S. adults used smartphones and tablets to conduct banking transactions than last year. Indeed, the increase in customers willing to open new accounts via their mobile devices is startling:

•    33% opened accounts with a mobile device in 2015, up from 17% in 2014
•    30% enrolled in mobile banking with a mobile device in 2015, an increase from 7% in 2014

On the other side of the purchase point, merchants must have the equipment that enables the mobile wallet process. Currently, Android Pay is accepted at more than 1 million stores in the U.S., including Walgreens, JetBlue, Bloomingdale’s, Macy’s and McDonald’s.

The Android Pay near field communication (NFC) system provides the option for a user to shut down a smartphone if it is stolen, so no one can use the phone as a credit card. In addition, the NFC system processes transactions via individual random account numbers — rather than your actual credit or debit card account number — so thieves can’t find your credit card number for their own phone or online transactions.

The mobile wallet replaces swipe transactions where a credit card number is exposed, and many consider it more secure than a magnetic card. However, the technology is still vulnerable to fraud via an account takeover. This means someone can access your mobile wallet accounts using a device under his or her control. In 2015 alone, more than 112,000 consumers suffered account takeovers via mobile wallets.

Interested in reading more? Here are some articles that may be of interest to you:

[CLICK HERE to read the article, "Wells enters wallet wars," from Banking Exchange. June 3, 2016.]

[CLICK HERE to read the article, "No more getting carded at the ATM," from Banking Exchange. May 20, 2016.]

[CLICK HERE to read the article, "Top Bank Meet Customer Expectations for Mobile Banking Channel," from Javelin Strategy & Research. May 19, 2016.]

[CLICK HERE to read the article, "Shop at these favorites," from Android.com, 2016.]

[CLICK HERE to read the article, "Everything You Need to Know About Android Pay, from Andy Boxall. May 20, 2016.]

[CLICK HERE to read the article, "No more getting carded at the ATM," from Banking Exchange. May 20, 2016.]

[CLICK HERE to read the article, "Suboptimal Security Solutions Leave Mobile Wallets Vulnerable," from Javelin Strategy & Research. April 14, 2016.]


Raymond C. Lantz, Jr. is the president and founder of USA Wealth  Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with  Ray Lantz on WBSM 1420AM or on the Radio Pup app.