A lot has been written lately about mobile banking (also known as M-mobile), whether or not it will become as popular as online banking currently is. Surely it will, but not until smartphones are available to a wider demographic. The biggest thing preventing online banking customers from mobile banking is lack of Internet access on their phones: according to a

Only 5% of online bankers use their mobiles for banking. 71 million U.S. adults use online banking, one-third of the adult population. In comparison, there are only 3 million users of mobile banking in the U.S., according to TowerGroup. But there are already more mobile users than internet users in the United States: In May 2008, there were 226 million mobile users (over the age of 13), while in June 2008 there were over 220 million internet users.

A May study by M:Metrics showed that U.S. mobile browsing had grown 89% yearly; as usage grows, it is becoming more advanced. “Consumption is quickly evolving from brief transactions, such as checking the weather or flight status, to time-intensive interaction with mobile Web sites”.

The mobile banking market will grow alongside the further adoption of smartphones. U.S. smartphone users spend an average of four hours and 38 minutes per month on the internet, compared to the over 26 monthly hours of all American internet users. An October study by Javelin showed that 42% of smart phone users have tried mobile banking, while only 11% who don’t have smart phones have.

The mainstreaming of smartphones is of course most evidenced by the iPhone 3G. While the phone is reaching a wider demographic than Blackberrys and the original iPhone, “the iPhone still appeals most to people with incomes over $60K,” wrote Compete’s Eleanor Baird earlier this month.

It’s clear that mobile banking will eventually take off. Current smartphone costs, and costs for cell phone internet connectivity are too prohibitive of widespread adoption. Mobile banking needs to wait for the technology to become more widely available, which should happen by 2011.

By Mark Alvarez