Traditional Banking Faces Disruption
May 28, 2014 – The Washington Post published an article on forces disruptive to traditional banking. Companies like Google, T-Mobile, Apple and Wal-Mart are offering prepaid debit cards and enabling customers to pay bills, make purchases and deposit checks using Smartphones.
The article cited a recent Accenture survey of more than 4,000 Americans, which found that in the 18-34 age-demographic 72% would bank with Wal-Mart, Google or T-Mobile. When Wal-Mart, in cooperation with American Express offered its Bluebird card, it attracted more than one million customers within its first year.
The article describes the benefit to Wal-Mart of its failed attempt to obtain a bank charter, allowing the company to reap the benefits of acting like a bank without the headaches of being regulated like one.
Banks remain in a strong position with large caches of customer and transaction data, security, regulatory compliance and trusted payment processing partners, but new avenues and technologies for electronic payments are making significant in-roads, particularly with young consumers.