The term “mobile wallet” has been thrown around quite a bit in recent months. Although it is sounds intriguing in concept, there does not seem to be a clear definition of what it actually looks like in reality. As pointed out in American Banker, no one can definitively say how it will impact banks, merchants and credit card companies as consumers begin purchasing more goods and services with their smartphones instead of debit and credit cards.
Given how much people already depend on their smartphones, the continued use of them for financial transactions is probably going to be around for a while. The question is whether banks will be able to benefit in some way such as monetizing their mobile customer data to make mobile wallets represent real money for the banks. In order to make this a viable possibility, a critical mass of consumers will need to use mobile wallets so that banks can persuade merchants to purchase mobile customer data that is believed to benefit the merchants.
One pilot project that showed some promise was done by Wintrust Financial in partnership with its mobile banking provider, FIS. FIS worked with a mobile wallet provider and ATM maker to create a cloud-based service that allows bank customers to withdraw cash from ATMs using a mobile wallet. When customers choose the mobile wallet option on the ATM screen, a QR code is shown that can be scanned with a smartphone app to complete the withdrawal. This reduces the time it takes for customers to get cash to a few seconds. According to Tom Ormseth (Wintrust’s director of non-credit services), Wintrust employees who participated in the pilot preferred using the app instead of a traditional ATM card.
Wintrust is making the cardless cash withdrawal service available at all of its 185 ATMs by the end of the quarter. If the employees taking part in the pilot are any indication of the level of interest, then this could be a realistic foothold in the mobile wallet arena as long as the cost Wintrust incurs in providing this service is reasonable.
For the source article, click here: Mobile Wallets and Banks