Apple claims their users unlock their phone as many as 80 times a day, while a new study from Dscout suggests the average person touches their smartphone more than 2,600 times daily.
For most people, they check in with their phones to interact with nine apps per day, totaling more than 30 apps over the course of a month. In many cases, these apps are communication platforms that help connect them with friends or gaming programs to help pass the time.
But there’s a growing number of FinTech apps that are making their way onto the average smartphone. From digital payments that replace the need for cash to online lenders that help cover emergencies with the tap of a finger, the mobile wallet is evolving. Let’s take a peek at the top three platforms improving money management.
- Digital payments
Forming a huge ecosystem of apps that help people shop, digital payments are perhaps the most common form of the mobile wallet. Whether it’s a latte at their favorite café or a piece of jewelry at an artisan’s market — with the right app, a smartphone phone will give you the ability to purchase it.
This ability relies on the widespread adoption of NFC chips. Standing for Near-Field Communication, it’s the tech that allows wireless communication between two devices — namely a smartphone and a retailer’s POS.
These apps could herald the end of the cash economy if enough consumers and retailers adopt these payment systems. While this system would certainly make paying for things easier, it isn’t without its drawbacks.
Some opponents question the benefits of going cash-free when it would disenfranchise those that don’t have access to these apps — or a smartphone at all. Thirty-three percent of mobile-owning Americans don’t have a smartphone, while five percent don’t have any kind of cell phone at all!
Digital payments have a champion in some of the biggest businesses in the world. The likes of Starbucks, Amazon, and even Walmart are not only retrofitting stores to support NFC tech, but they’re also creating their own digital payment apps to accommodate cash-free transactions.
Of course, now that these apps are starting to gain popularity, the average retail bank is ready to jump on the bandwagon. Big banks like Chase, Bank of America, and Wells Fargo have apps that let its customers tap (or scan) their phones to pay. They join third-party apps like Apple Pay and Google Pay that facilitate digital transactions.
- Day-to-day banking
Many of the retail banks’ digital payment systems hinge on apps that support greater day-to-day tasks — necessitating an account with these institutions to access these benefits.
The unbanked (some 8.4 million households who don’t have bank accounts) won’t be able to use these apps. The reasons why they may not have an account varies. In many cases, it’s because mainstream banks have strict requirements like minimum balances or account fees that are challenging to meet if you have very little cash to spare.
As controversy mire some of the Big Banks, there are also some individuals who don’t trust these companies with their money. They make up 24.2 million under banked households who limit how much they bank with these institutions.
Together, the unbanked and under banked make up just over 25 percent of the population called the under served.
Thanks to the mobile wallet, the under served no longer need an account with a mainstream bank to access day-to-day banking on their phones. A new breed of mobile banks offers convenient online banking without fees or minimum balances.
The under served can create a free account with mobile banks like N26 or Chime to cash checks, pay bills, or save money.
- Online borrowing
Saving money is an important feature of these mobile banks. An emergency fund acts as a safety net should a sudden loss of job or medical issue strike. But it may also help cover smaller issues like an unexpected household repair or a surprising surge in your utility bills.
Without savings, these issues may jeopardize anyone’s finances, and borrowing cash is a common way people cover the unexpected things in life — as well as larger purchases like tuition or a new house. Small and large personal loans bridge the gap between your personal responsibilities and your financial capabilities.
However, traditional loans through mainstream banks may be difficult to secure. Like their basic savings and checking accounts, their personal loans may have strict policies in place limiting who they approve.
Minimum credit scores, plus a lengthy in-person interview at odds with the modern mobile mentality, could disqualify the sub-prime and under served from borrowing. However, a new kind of online lender like MoneyKey provides an alternative way to apply for and secure personal loans.
In moving to an online platform, online lenders eliminate many of these barriers stopping the under banked from finding the help they need through a variety of options — like payday loans, installment loans, and personal lines of credit. Which one is available depends on where someone lives, so they’ll have to learn about online borrowing options in their state before they decide they prefer one or the other.
Online lenders offer quick and convenient ways to apply for an installment loan via their app. Customers can use this app to submit loan requests, review their installment loan status, and check in on details like their balance and payment schedule. There’s no need to take time off work to make meetings according to the bank’s business hours, nor is there as much emphasis on something like a credit score.
Consider bulking up your mobile wallet
While the mobile wallet may seem like a perfect stand-in for a traditional billfold, it’s far more than a one-to-one replacement for cash. As FinTech companies grow in scope, the abilities of the mobile wallet will evolve. It’s changing the way people bank and borrow, as mobile banks and online lenders revolutionize traditional services.
While the under served have the most to benefit from a robust mobile wallet, anyone can take advantage of these apps. So head to your favorite app store and start looking!
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