Consumers turn to mobile card services to manage finances

Dive Brief:

Consumers increasingly are using mobile card services (MCS) linked to their credit, debit and prepaid cards to help them manage their spending budgets and other finances, according to the Mobile Card Services Playbook, based on research from PYMNTS.com and Ondot.
The research was based on a survey of 9,513 consumers and a closer examination of how the 3,240 of those with MCS-linked cards used those features. The study showed that 53.3% of linked cards users liked the ability to turn off their cards in real time to fight fraud, while 24.3% favored features allowing them to limit their spending with certain types of merchants.
Regarding purchasing practices, 85.6% said they used linked cards to buy groceries, while 71.9% purchased meals at restaurants, 59% bought clothes and accessories and 69.3% purchased gas, according to the study.

Dive Insight:

The report also reveals that 52.1% of users of MCS-linked cards also liked the ability to receive text message alerts regarding transactions as a way to help protect against fraudulent card usage. At a time when data breaches and fraud continue to be big problems, some customers are taking matters into their own hands by closely monitoring use of their cards.

Consumers also use alerts as a way of monitoring usage of family members and others who they may have allowed to use their cards. For example, 27.9% of consumers studied with incomes of $150,000 or more annually allowed their dependent children use of their cards, while 35.6% did so for personal caregivers. That also adds complexity to retailers' understanding of who may actually be buying from them when a certain card is used for a purchase.

The report connects these financial management capabilities and the strong desire to use them with the overall notion of increasing personalization in retail and payment sectors. As it turns out, personalization isn't just for retailers. Using MCS is just another way consumers are taking advantage of the ability to customize various aspects of their daily lives, in this case to the degree of how much they spend and where.

Use of these features is also a natural outgrowth of increased mobile commerce activity. Consumers are using their mobile smartphones for searching, shopping and payment, so it makes sense that they are also growing comfortable using the money management features of mobile wallets and payment card apps.