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Over the past five years, the banking industry has witnessed tremendous growth in new mobile banking technologies thus leading to improved customer experience (Arputharaj, 2016). Examples of such mobile banking technologies include mobile banking apps such as Apple Pay, Samsung Pay, Android Pay, PayPal, Payoneer, and Google Wallet. With these technologies, financial institutions have a cutting edge over the usual proprietary mobile applications associated with traditional financial systems. However, with these new banking technologies also come challenges or barriers for both financial institutions and their customers as these technologies have both advantages and limitations.
Primary Uses of Mobile Applications
According to Arputharaj (2016), mobile banking applications such as Apple Pay are primarily used doing financial transactions through their cell phones, such as checking account balances, transferring funds from one account to the other, making payments for goods and services, and receiving liquid money from clients or relatives abroad. Some of these uses of mobile banking applications are more popular among customers than others mainly because of the ease and convenience with which they enable customers to carry out transactions. Also, the difference in popularity among bank customers is also due to the level of security and safety that each of these mobile apps gives to customers. For instance, most people consider Apple Pay to be more secure than Google Wallet.
Barriers Customers Raise
In the use of mobile applications, customers raise various barriers that are major concerns for them as they use these apps to do their banking. According to Bhatt and Bhatt (2016), one of the key factors that affect or influence the usage of mobile banking apps among customers is security concerns. Most customers are concerns about the safety and security of their money and that of themselves because of increasing cases of online scams where fraudsters hack into these apps and steal customer information. Also, despite the ease of navigation, simplicity in operation, convenience, and time-effectiveness, customers are concerned about technical issues and lack of awareness or information on how these apps work (Bhatt & Bhatt, 2016). To overcome these barriers in the use of mobile banking apps, most financial institutions are enhancing the security of these applications to make them safer. They are doing this through collaboration with the developers of these apps so as to ensure that it is more difficult for fraudsters to hack into these applications. Furthermore, financial institutions are seeking to overcome these barriers by educating their customers on the value of banking using these mobile applications.
Advantages and Disadvantages
Compared to proprietary bank applications, modern payment methods like Apple Pay and PayPal are faster and more convenient. They enable customers to do transactions over their mobile phones without having to fill up many physical forms or do a lot of paperwork which is usually associated with the proprietary banking applications. Additionally, payment methods like Apple Pay are a little bit safer and secure than the proprietary banking applications (Arputharaj, 2016). These modern mobile banking applications enable customers to buy digital goods online using their mobile phones without having to worry about their personal credit card and banking details being stolen by cyber thieves. According to Arputharaj (2016), these apps also have the advantages of speed, low cost, convenience, time-saving, easy access, simplicity, cross-border payments, and universality.
However, these modern mobile banking applications are disadvantageous in that they increase the cost of banking as customers have to pay additional charges for doing transactions using these apps. Further, mobile banking applications such as PayPal limit the amount of funds that customers can transact at any given point in time. This and other restrictions sometimes inconvenience customers thus making them unpopular among clients who deal in large sums of money. What is more, many mobile banking apps today do not give customers the ability switch between financial institutions and those that allow this have additional charges which make them unpopular among customers. According to Shannak (2013), mobile banking can at times be slow because it relies on internet strength and may at times involve a lot of procedures and paperwork during registration.
Therefore, in conclusion, mobile banking has transformed banking experience for customers across the globe because it has made banking more efficient, convenient, accessible, faster, and less costly. However, issues of safety and security of customer information still remains a barrier for many users of these applications.
Arputharaj, S. (2016). Advantages and disadvantages of mobile banking in India. National Conference on Emerging Business Strategies in Economic Development, 1(1), 73-77
Bhatt, A., & Bhatt, S. (2016). Factors affecting customers adoption of mobile banking services. Journal of Internet Banking and Commerce, 21 (161). Retrieved February 17, 2018, from http://www.icommercecentral.com/open-access/factors-affecting-customers-adoption-of-mobile-banking-services.php?aid=70189
Shannak, R.O. (2013). Key issues in e-banking strengths and weaknesses: The case of two Jordanian banks. European Scientific Journal, 9(7), 239-263
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