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Amanda Morrall talks to Fiserv's Jim Tobin about mobile phone banking and why New Zealand is poised to become a world leader

Posted in Personal Finance
See video

By Amanda Morrall

If you needed more evidence that the standard wallet is set to become a thing of the past, consider this: in the last three years, the value of transactions processed via mobile phone technology has soared from US$1 billion to US$30 billion. 

Those of us who remained attached to bills, plastic and loyalty cards by the dozen crammed in the leather may cling to tradition but it could be just a matter of years before the digital revolution will render the wallet void of anything other than sentimental value.

Jim Tobin, senior vice-president and general manager of Mobile Solutions for the global multi-billion dollar giant Fiserv, paints a bold picture of the future of banking; one where tellers, bank books and billfolds have been made redundant.

"Mobile wallets are around the corner. There were some starts and stops around contactless technologies but what's happening is people are using their mobile phones to do so much commerce now they are bypassing the resistance to having swipe technology."

Tobin, on a recent visit to Auckland where Fiserv has grown from a team of 80 to more than 200 since acquiring the Kiwi tech company M-Com, predicted that "2014 will be the big year for mobile wallets."

Consumers, at least those who haven't made the leap, will be naturally worried about security; either losing their phones and thus money or else having it siphoned out from under their nose.

Tobin says it's an understandable fear given the explosion of high-tech crimes and increasingly sophisticated computer based fraud. To counter those concerns he points to the surge in R&D aimed at tackling this problem.

"The greatest area of technology spend in the world right now is on mobile security. Computers are being rapidly displaced in some markets just by smartphones and in some markets by smartphones and tablets. Enterprises of all types including banks have to get that security right because they are betting their business on this technology."

It is estimated there are now more than two billion smartphone users worldwide and that number is set to soar as more people make the leap and also as costs come down. With consumers barreling in this direction by the million, Tobin said companies serving this marketplace have recognised a need to ensure security is second to none in priority.

"The effort around security for mobile is where all the best minds, all the best technologies are going. I think the security levels are going to be higher for mobile phones and tablets than they ever have been for PCs."

While mobile banking technology allows for contactless payments, ATM withdrawals and other financial transactions that used to be done via a computer, the facility has also presented other possibilities, including peer to peer lending, and as a form of basic banking for fringe sector customers whom might normally be turned away from banks.

Tobin says in bringing together such a wide range of technology experts from around the world to work here in New Zealand where Fiserv's mobile "centre for excellence" has been situated, has given the company international insights on trends and also potential applications.

"Our office here is a wonderful group of young New Zealanders but it's also people from all over Asia Pacific, and Russia and China and those people bring not only their skills but an awareness of what's going on in their local economies."

Tobin sees opportunity for mobile banking technology to tap and serve a community of people who have been traditionally shunned by the banks because of impaired credit or low income.

By using a mobile like a pre-paid credit card of sorts,  some users are finding they have an alternative to the banks outside of stashing cash at home.

"For the unbanked or for the financially illiterate mobile banking allows us to open that up," said Tobin. 

Fiserv's Mobiliti platform is used by more than 1,000 financial institutions worldwide including ANZ Bank, the Bank of Ireland, Scotia bank, ANZ Group .

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I use electronic banking

I use electronic banking extensively.   Very happy.  But for personal walking around expenditure I use cash.  Works very well, is glitch free, and fast.
Cash is the coming thing.  I am an early adopter.  And it works !

It will the the norm soon for

It will the the norm soon for some dodgy blokes in a hoodie asking "gime your phone bro'" instead of "hanover your cash bro!"

From a Reserve Bank point of

From a Reserve Bank point of view electronic transactions are cheaper than cash ones. There is no printing and distribution costs. There are costs to do with the security but there are costs for keeping cash secure too. 
From customer point of view cash has no transaction charges while electronic transactions often do.
The big difference between cash and electronic money is that individuals control the storeage of it. There is always the option of keeping it in your wallet, safe or even under the mattress.
I wonder if the Reserve Bank subcontracted to a big software engineering company the creation of a no transaction charge electronic wallet if this would eventually save them money from the printing/distributing cash. And by making some customers less dependent on the big 4 banks decrease the excessive profits they are making, much of which leaves the country.
I know it is not the complete answer to the monetary madness of our banking industry but maybe it would be a step forward?