Mobile is clearly becoming dominant, with exceeding even the time we spend watching TV. Within mobile usage, mobile apps dominate mobile web usage. Commerce marketing company Criteo found that of all mobile transactions (in North America), 44% are completed in an app, with only 23% completed through mobile web accounts. What is more surprising, is that there were 33% more mobile app transactions than on desktop.
Mobile shows no signs of its dominance slowing down. Why would it? Processors are becoming more powerful, the average 2019 phone has comparable RAM to a low-to-mid range laptop, displays are big and bright enough. With 4G and the introduction of 5G, inc conjunction with better data-usage packages, phones are the best way to browse. They can be used anywhere, anytime.
What’s more important in the money transfer market, is that a lot of the time transactions are necessary when on-the-go. Perhaps you are abroad on holiday and running low on money; using a mobile app to transfer money could take under a minute, which makes finding an internet cafe feel like an act of medievality.
The mobile money transfer market was $21.15 Billion in 2016, but is expected to reach $112.29 Billion in 2021.
Which are the most well known money transfer apps?
Western Union App
Operating in 200 markets, Western Union is the top of the pile in terms of presence. With intermittently low rates fluctuating back up, it seems they are a good option in the quiet periods, but hike rates up during the busy periods (summer).
Payoneer is one of the largest money transfer companies, but still charges up to 3.5% in cross-border fees, as well as a $29.95 annual feel on the Mastercard debit card that they offer.
With fraud settlements and compliance penalties, Moneygram’s rich history is slowly being tarnished. Moneygram is a huge company that still operates in 200 international markets.
Without a doubt the best service of the four, TransferWise is quickly growing and is perhaps the most well-known “new” fintech and mobile-centric money transfer company, offering a tiny 0.5% transfer fee with no other account costs. It still only operates in 20 sending markets, though.
Whilst these are the most well-known, there are many Transferwise-like apps, most of which tend to outperform Western Union, Payoneer and Moneygram in almost every aspect.
When will they surpass transaction made on desktop?
It is difficult to gauge overall whether using mobile apps or a desktop is the safest option for mobile banking and/or money transactions. There are a few variables.
Firstly, the most dangerous element of transactions tends to be the security of the internet connection that you are using. When using public Wi-Fi, for example at an airport or coffee shop, then you are always going to be at risk of someone using a certain tool to record the traffic floating through the network.
Whilst it is unlikely, it is certainly possible that your username and passwords could be captured if typed in during a session on shared Wi-Fi. This, of course, mostly harms mobile users, whilst desktop users are more likely going to be using their private home Wi-Fi.
There is a way to mitigate this, which is to use the cellular connection, most likely 4G, to send money.
On the other hand, desktop users often share their computer with the family (i.e. children), which poses as a threat as they are more likely to introduce viruses to the computer, for example a keylogger who can capture your PayPal login information.
Android mobile users are also at particular risk because of the flexibility of the Operating System, it is more vulnerable to third party apps. Whilst this is the case for Windows PC users, most will admit that they have anti-virus software on their PC, but have not taken precautionary measures on their mobile.
Bearing these safety tips in mind, there is one thing that mobile users cannot really mitigate. Many of the mobile money transfer companies are young and/or have small infrastructure. Some may lack expertise or the resources to keep users’ information secure, compared to say, a large multinational bank that desktop users are more likely to use.
Will there soon be no more cash?
Mobile apps would certainly both thrive on this prospect, as well as be the driving force behind it.
When you can set up an online account, e.g. TransferWise, within 5 minutes and have an international account with a card delivered a few days later, it is difficult to see the need for cash. Particularly when transactions are utterly frictionless with minimal fees and with no third parties or middlemen like mastercard.
Cryptocurrency push this notion to the next step too, entirely cutting out any authoritative party that could possibly be in control of your money, or sit between transactions. A cashless society in this sense would likely mean full autonomy for the user.
On the other hand, if cryptocurrency and good-natured fintechs did not prevail, a cashless society could mean less autonomy. We would have no choice but to expose our personal information online to companies, we would rely on there being no technology problems when accessing our money, and we would be completely exposed to changes in interest rates.
A potential benefit of centralised, cashless money is that it could reduce crime. Stealing from ATMs and cashiers would be abolished. Importantly, there would also be less money laundering and fraud, as well as tax collection compliance vastly increase thus raising government revenue.