For all the personal finance advice you may read about new ways to save money, invest more wisely
, and build wealth
, there are significant changes underway within the financial services industry that could have a far more tangible impact on how you spend and save. Here are a few ways your go-to money-management methods could soon evolve.
Passwords will shape-shift.
Tired of getting locked out of your accounts because you forgot a password? Or because you can't quite manipulate that smartphone screen to include one character in your password that is capitalized? Your mobile log-in woes may become a thing of the past. At its WorldWide Developers Conference held in June, Apple
(NASDAQ:AAPL) announced that Touch ID, the brand's fingerprint-recognition technology that's embedded into the iPhone 5S home button -- it's currently used for unlocking the device and making purchases in iTunes and iTunes app store -- will expand to include third-party integration. Theoretically, the news could mean smartphone and mobile tablet users can make purchases, both online and in-store, by using their thumbprints to log in and initiate payment. Bank Innovations reports that both Bank of America
(NYSE:BAC) and PayPal
(NASDAQ:EBAY) are among the major financial brands that have publicly expressed interest in using the biometric feature for their private-branded apps. Similarly, Bank Innovations recently reported that the start-up Socure
is testing the use of biometric facial recognition software for the financial industry.
You'll have more reasons to use mobile wallets.
Consumers in North America have been slow to adopt mobile wallets compared to their European counterparts. Though a recent Accenture
report revealed that privacy and security concerns explain some of the slow adoption, there's another reason Americans haven't taken to mobile payments: Due to fragmentation within the mobile wallet ecosystem, there isn't a "one-stop shop" that gives customers a reason to change their current behavior. Take the apps offered by banks, for example. They tend to focus on accessibility, allowing customers to check account balances, access real-time transaction history, and even perform banking-related tasks, like ordering checks or paying bills. They're generally not designed to encourage customers to make a contactless payment by directly using the app. Proprietary mobile payment apps not offered by financial institutions incentivize mobile payment use with rewards and an enhanced checkout experience, just as the highly successful Starbucks
(NASDAQ:SBUX) Card Mobile app (the reported driver behind more than $1 billion in sales for the brand last year), has done. All the while, prepaid products like open-loop debit cards with the Visa
(NYSE:V) logo that can be used anywhere, and private label gift cards have gained in popularity, with usage outpacing both debit and credit card products, according to a recent white paper
by MobeyForum. To move customers into mobile payment use, experts at MobeyForum predict that a convergence will occur that offers both accessibility, and rewards, as financial institutions understand how to make all of these pieces and parts work in tandem. Based on recent happenings in the financial services industry, that time may be now. BBVA
(NYSE:BBVA) recently announced plans to add a virtual prepaid card that connects to a customer's bank accounts -- including those not held through BBVA. It will also provide a Near Field Communication (NFC) sticker users can affix to a smartphone that lacks an NFC chip to support contactless payment. (Many of the features planned for the North American release exist in its apps for European customers.) BBVA's technology will also leverage Visa's new host card emulation technology
, which allows Android users the ability to "wave to pay," and financial institutions with the necessary technology to store credit card data in the cloud to facilitate mobile payments.
Virtual currency won't be scary.
If you hadn't heard of Bitcoin prior to 2013, your first impression of the digital currency may not have been all that positive, given the wide range of bizarre Bitcoin-related events
that brought the anonymous, unregulated virtual currency into the mainstream media headlines. But as the saying goes, there is no such thing as bad press; the controversial events that brought Bitcoin into the limelight subsequently sparked attention by global governments, venture capital investors, and Wall Street analysts. As a result, Bitcoin isn't the dark, mysterious, even scary "non currency" it once was. In fact, retailers like Overstock
(NASDAQ:OSTK) and Lord & Taylor, and travel site Expedia
(NASDAQ:EXPE) now accept Bitcoin as a mode of payment. As of a few weeks ago, MasterCard
(NYSE:MA) has held a valid patent
for "payment interchange" of non-traditional sources, which specifically includes virtual currency, signaling that Bitcoin and similar forms of virtual currency aren't just here to stay -- they are likely to become the new normal.
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