The Rise of Cryptocurrency Mobile Banking
As the number of smartphone users increases, mobile apps have increasingly dominated the software development industry.
Over 70% of the population in the United Kingdom (35 million people to be exact) is expected to make use of mobile banking applications by the year 2023, according to CACI. For reference: the number currently sits at 22 million, when recorded at the end of 2018.
Many of these mobile apps are provided by local & international banks; however the likes of Apple and Google have been incrementally expanding their respective international presences as payment providers.
Despite this, they have been underachieving with regards to their own expectations as well as in the eyes of many pundits due to disappointing adoption and usage rates.
Uncanny Silicon Valley: Apple and Google Issues
Whilst the global vision of Apple Pay and Google Pay is admirable, they have both failed to win over consumers as well as expected.
For example, if you are are living in Hungary (or Luxembourg for that matter) then you may not have much awareness of Apple Pay or at least no first-hand experience. This is because it has only recently started being reported as being close-to-launching.
Furthermore, research published by Loup Ventures indicates that only 20% of smartphone users make use of their phone as their digital wallet.
Gene Munster, managing partner of the company responsible for the research believes that Apple Pay currently has 252 million users worldwide, which is fairly small proportion of the active iPhone install base at just 31% adoption among owners of Apple phones.
Analyst Timothy O’Shea (of Jefferies investment banking), conversely, foresees the Services part of Apple comprising 25% of the company revenue by the year 2020.
Official numbers released by Apple CEO Tim Cook counted over 1 billion Apple Pay transactions having been made in the third quarter of 2018, which is just less than half that of digital payments giant Paypal – which (according to Statista) processed approximately 2.4 billion transactions in the same quarter.
Potential reasons include a depreciation of public trust in these mobile giants’ parent companies: Apple and Google, along with Silicon Valley in general, because of data privacy, and a slow roll-out among countries with higher-income economies.
Cryptocurrency Meets Banking, via Mobile
Moving to the world of cryptocurrency mobile banking, we find a diverse and burgeoning market comprised of organisations large and small
Among the larger examples are the Taiwan based HTC’s ‘Exodus 1’ phone – which was infamously marketed as being purchasable only with Bitcoin and even more recently, the ‘Exodus 1s’, which is capable of running a full Bitcoin node.
Also see: Samsung, with it’s ‘S10’ phone, both of which include cold storage as standard.
We also see a new generation of innovators which seek to bridge the gap between fiat banking and cryptocurrencies, using mobile applications and virtual debit cards.
Danial Daychopan, the CEO and founder of Plutus, which aims to do just that with its carded solution set to release later this year.
Daychopan describes Plutus as “a crypto-friendly alternative to traditional mobile banking”, which is “not a bank, but provides all the same financial services, and also incorporates cryptocurrencies in an easy-to-use and secure manner.”
On crypto-banking, Daychopan continues that:
“There are a few areas within crypto banking that are highly problematic…
“Firstly, ease-of-use. Cryptocurrencies are heavily associated with the tech-savvy and this is a strong deterrent for newcomers…
“Secondly, the unreasonable fees. As an emerging market, there are minimal reputable and secure exchanges that provide reasonable fees for buying and selling crypto (especially for UK customers) – some charge as much as 4% with further hidden costs…
“Finally, and most importantly, security and trust. Many crypto startups offering banking solutions do not have the security measures in place to be trusted with large volumes of crypto-assets.”
For reference, benefits of Plutus are set to include a “fee-less decentralized exchange into the finance app so our users can securely trade between crypto and fiat on-the-go” and blockchain-backed token rewards that are equivalent to 3% return from every purchase made.
Other cryptocurrency-meets-fiat banking solutions include Revolut, which continues to face an array of accusations after UK newspaper The Telegraph published various articles including coverage of alleged AML lapses and poor working conditions earlier this year.
Featured image courtesy of Shutterstock.