The United States is one of the most mobile countries in the world; we move around a lot. America’s interstate highway system transformed our country. Our economy greatly benefited by the ease with which goods could be moved from one part of this vast country to another. More than just moving goods, we also enjoy the freedom of driving our cars and going places. There is so much to see and being mobile has allowed us to do that.
Now we are on the verge of a new mobile evolution. The ability to comparison shop, find deals, and make purchases digitally has been around for a while. Doing all that on smaller screen mobile devices (e.g., smartphones and tablets) is taking this further and becoming more mainstream. A report was issued earlier this month that noted that 25% of people who do their banking digitally now do it exclusively on mobile devices. Another report noted that one in five people no longer carry cash, and that 46% of consumers rarely use cash for purchases. That is a significant change from just five years ago.
I wonder how this will impact our banking and purchasing behavior in the next five years. The youngest of the “Millennial Generation” will be seniors in high school this coming school year. So in five years all millennials will be in the workforce, or really close to it. You can bet this tech-savvy generation will continue to influence digital and mobile banking and commerce.
This evolution will not be complete until some of the most serious concerns, chief among them being security, are resolved. Financial institutions and financial technology companies (FinTechs) are diligently working on this every day. Single-click solutions and user ease are making mobile activity more attractive, as long as we have comfort that our information is secure.
Yet one other great challenge exists. We, as consumers, hate fees associated with our transactions. We pay them when we must, but any additional overt fee is a deterrent to making mobile purchases. Fees must be embedded because if we see an add-on fee, we will find another way to make the transaction.
This brings us back to you—public entities, higher education institutions, and not-for-profit organizations. Most recognize it is expensive to absorb fees if the constituents are not assessed a fee. Are there not ways other than using the now common “convenience fee,” which only keeps the clear majority of constituents from making payments electronically? The answer is “Yes,” and we will discuss these in another blog.
Know this: if you want to overcome the inefficiencies associated with accepting cash, checks, and in-person payments, then you need to look at alternatives.
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