A generation or two ago it was commonplace for people to have a special day where they took care of their banking activities for the week. People would get to the bank during their lunchbreaks or after work, and wait in line. When it was finally their turn, they’d make deposits, take out cash to tide them over and essentially do all of their household banking activities until their next visit to the local branch. There are still some folks that do this, but spending dedicated time each week on a line in a local bank has quickly become a thing of the past.
What killed off this common practice? Automated Teller Machines – ATMS! When these machines began to spring up in more locations, they helped to allow people to take care of their banking chores quicker, and without waiting in long lines inside the bank. The initial rise in popularity of the Internet also contributed to Americans spending less time inside the physical walls of banks as well. With credit card companies, mortgage companies and even utility companies allowing people to pay their bills online, there were even less reasons for people to actually drive to a bank and go inside. Heck, they hardly even have to write checks anymore.
Today there are other banking breakthroughs that help people to avoid visiting the bank in person the majority of the time. Online payment processors, mobile money apps and mobile money transfer services have grown by leaps and bounds over the past few years. As a matter of fact, the rate at which people are transferring money online via mobile offerings doubled between the years of 2014 and 2015. Not everyone yet feels comfortable using these types of mobile financial solutions, but the number of consumers who do is growing by the minute.
Of course, it seems that millennials are leading the way. Americans between the ages of 18 and 24 represent one of the largest groups of adopters of mobile financial/banking solutions. About one out of every ten people in this age group reports having sent money via their mobile devices. Compare that to the people in the over 55 age group, and the number plummets to only one out of every 200 people. These stats were provided from the findings of a study done by mobile money company Azimo.
Michael Kent is the CEO of Azimo. When asked about millennials and their use of mobile devices to send money he said, “It’s not a surprise that the younger generations are using technology to send money overseas. Online and mobile payments are only going to become more popular as people become more aware that they’re super easy, low cost, fast and secure. We want to help our customers of all ages become increasingly savvy about how they send money abroad and prevent them from being ripped off by the traditional high-street players in the market.”
With millions of people being classified as underbanked or unbanked in the United States, the providers of mobile money solutions are all in a race to try to reach as much of this almost-untapped market as they can. On a global level, there are billions of people who qualify as being unbanked. The providers of mobile money transfer services are also eager to reach as much of this worldwide market as they can over the next few years.
Brick and mortar banks will likely be around for quite some time to come. With dozens of new mobile money apps and services now available, and with more coming in the future, those physical bank branches are going to have even more competition from these types of mobile solutions in the very near future.
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