While banking was once characterized by quaint features such as the ability to stroll down to the neighborhood branch, where the tellers knew your name and might even give your child a lollypop, the combination of competition in the industry and advances in technology has fostered the simultaneous decline in face-to-face customer service and rise of electronic account management. We’re now seeing paper checks make way to prepaid cards, banks offering online-only services in greater numbers, and a rapidly growing market for mobile wallets, among a number of other notable changes to the tools of the trade.
Harlan Platt (Professor of Finance – Northeastern University’s D’Amore-McKim School of Business):
“I think the evidence, based on the slow adoption of this existing technology, is that people do not trust it. There is something magical about waving your phone and buying something even though technologically it is very close to waving your credit card. I suspect it will require a business model in which consumers actually get something back from using their phones as payment vehicles, much like banks that offer 1 or 2% cash back’s now for credit cards. … [Banks] will [also] need to provide guarantees that scammers won’t pilfer the technology and cost consumers money.