We’ve discussed the contactless payment trend that requires a consumer to merely wave their payment card in front of a reader to pay at the cash register. We’ve discussed e-commerce, which has unfortunately become a goldmine for identity thieves. The next newer, bigger better innovation is mobile banking and commerce. It is yet another step to further the world’s progression toward doing everything faster, faster, faster.

What is Mobile Banking?

Mobile banking enables consumers to access their personal information through their cell phones, with the help of special software. Mobile banking launched in the U.S. earlier this year amidst a giant media storm. Cell phones and banks are taking sides and picking teammates. Citibank is the only bank thus far who has refrained, offering mobile banking that is compatible with all mobile service providers.

In India, where the current number of mobile banking users stands at about 1.6 million, mobile service provider Ngpay is estimating 250 million users by 2011.

Will Plastic Credit Cards and Debit Cards Become Obsolete?

Mobile commerce would enable consumers to click through the payment options on their cell phones, which some companies are proposing be referred to as “mobile wallets.” The development is expected to eventually make debit and credit cards completely obsolete.

“We are planning to introduce mobile wallets and remittances in coming years,” said Rahul N Bhagat, executive vice-president of retail banking at HDFC Bank. “We are looking at getting debit card and credit card services on mobile phones for transactions,” he added.

How Safe and Secure is Mobile Banking? 

This sounds pretty cool, but as with all new inventions, there are some glitches to work out where reliability and interoperability are concerned. The contactless payment concept involves using low-emitting radio frequency signals, or near-field communication technology. Cell phones would need to have chips embedded in them to operate similarly when the mobile wallet technology becomes mainstream. People do a lot on their cell phones. I wonder what, if any, privacy breaches or identity theft cases could result from the new technology? Of course, the same could be said of Internet banking, of which I am a faithful user.