Does Mobile Banking Require a Card?

MicroSave's Briefing Note No. 80 suggests that the full potential of mobile banking is most likely to be realized from the integration of mobile and card solutions.

Mobile banking was thought of as an alternative to cards, a cheaper, easier-to-manage product/channel combination that would sweep away the straightjacket of pricing and rules associated with the card industry. However, an increasing number of practitioners and providers believe that this is a simplistic view. Factors that contribute to this shift in view include:

• Delay of the mobile payments revolution in many markets;
• Huge increase in the number of retail banking customers with access to a basic card product;
• Mobile payments are not being used as they were supposed to be used, people are using them only when face-to-face transactions are not possible;
• Inconvenience in mobile payments operations;
• Difficulties in dispute resolution.

Combining a card with a mobile solution will undoubtedly increase the complexity of launching a mobile payments solution. However, it will enable users to benefit from the existing card infrastructure and reduce customer acceptance risk in mobile payment solutions.