It wasn’t so long ago that the banking industry and the system of consumer purchasing underwent a revolutionary change with the introduction and proliferation of credit cards and debit cards. Most consumers rapidly embraced the notion that funds could be transferred from consumer to retailer by an electronic transaction rather than by an exchange of cash.
Now it appears that the business world is on the verge of a similar revolution in commerce, much of which has been triggered by the tidal wave of popularity surrounding smartphones. It now appears likely that smartphone technology will soon drive major changes in banking and commerce, and indeed some of these changes are already happening. Here are some of the new financial tools that every business needs in their arsenal.
Digital deposit technology is now available in the form of mobile phone apps which can take precise pictures of the front and back of any check, store it in digital file format, then securely send it to a bank for deposit. Upon arrival at the bank, the digital file is then processed in the same manner as if the deposit had occurred in the lobby with a bank teller accepting the deposit physically. While not all major banks have yet embraced this technology, some of the largest financial institutions, for instance Bank of America and CitiBank, have recognized that it has huge potential for the future, and are already offering it as an alternative means of depositing checks. Any business that accepts payments from its customers can benefit from digital depositing tools such as this.
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Online Bill Payment
Bill payment apps are just beginning to become popular, but they require setup with a person’s financial institution and as yet, only a few major banks have joined in on this emerging technology. Here’s how it works: a consumer with a hardcopy bill or invoice takes a photo of that invoice with a smartphone and the resulting digital file is stored on the phone. Then the file is transmitted to the person’s bank, and the critical information on the invoice file is evaluated in terms of amount, due date, and payee. Then an electronic transaction is made to the payee, and the bill is paid. As yet, only a few banks offer this because it is very new technology, and some financial experts doubt that banks can win the online bill pay game, but it seems very likely that it will soon become one of the ever-growing number of financial transactions that smartphones begin to manage.
Mobile Payment Apps
Mobile payment apps differ from bill payment apps in that these are more akin to making credit card purchases at a department store or at the grocery store. To use this new tool, an app must be loaded on a smartphone which stores the owner’s credit card information or debit card info. At any consumer outlet or store that accepts this payment method, the owner’s phone is conveniently linked to an in-store reader, and the payment is processed in the same way as if a credit card had been swiped for payment. This technology is already being used by businesses and stores that see the future of smartphone usage, and have sought to cash in on the wave of the future. Apps like these are particularly useful for tiny businesses just starting out, making it much easier to accept payments even before the company can invest in other financial infrastructure tools.
Many of the newest technologies emerging for banking and business in general revolve around smartphone usage, which is entirely understandable. Most consumers have a smartphone these days and already spend a great deal of time on these devices, so the idea of using them for banking and purchases will be a natural extension of their demonstrated convenience. It seems highly likely that financial tools like these will be preferred in the future to rummaging through wallets and purses for credit cards. Financial institutions and retailers would be wise to recognize this trend and adapt for it.