A rock climber clinging precariously to the side of a cliff gets a text alert on her cell phone that her checking account balance is low. She quickly transfers funds to avoid an overdraft, then resumes her ascent.
A husband and wife on a road trip suddenly remember they forgot to send their car payment before they left home. No problem -- the wife, sitting in the passenger seat, zaps it off from her handset as they zoom down the highway.
Judging from these TV commercials, using a cell phone to check your bank balance, transfer money and pay bills seems like a no-brainer, so easy and convenient that anyone who doesn't do it must be some kind of Luddite. More than 3 million people used mobile banking last year, up a remarkable tenfold from a year earlier, according to ABI Research, a technology market research firm. And that trajectory is likely to continue.
If you're not yet using your phone to check your balance, pay your bills or move money from account to account, you will soon. "There's little doubt that the era of mobile banking is coming," says Mark Schwanhausser, an analyst at Javelin Strategy and Research in Pleasanton, Calif.
That begs the question: How safe is it?
More from MSN Money and Bankrate.com
With all the tech-savvy crooks and identity thieves lurking about, is it really a good idea to have your precious financial information floating around the airwaves or residing on a piece of gear that you could easily lose? According to a recent Javelin study, security, or the lack thereof, is the No. 1 fear among potential mobile banking customers.
The good news is that the fear is so far worse than the reality, thanks in part to the financial industry's heavy investment in security technology. Among other things, "all information transmitted between servers and the mobile device is encrypted as with regular online banking," says Steve Furman, Discover Card's director of e-business. As a result, "the likelihood (of fraud) is no greater than using your desktop browser," he says.
Discover, like many banks and credit card companies, promises to cover 100% of a customer's mobile fraud losses. Other banking institutions, such as Bank of America, offer zero liability as long as customers report any fraudulent transactions within 60 days and have not violated other protection rules.
Mobile banking comes in three different flavors. Most banks emphasize one method or a combination of them.
MSN Money multimedia
Will your cell phone spill your secrets?As handheld devices get smarter and faster, consumers are using them to handle more financial data -- upping the stakes if a phone is lost or stolen. Here are 3 ways to keep your data safe.
SMS: Short messaging service, or SMS, works with just about any cell phone sold in recent years. Basically, it involves you and the bank exchanging text messages like infatuated teenagers. Once you have registered your phone with the bank, you can ask the institution to send you a text alert when, say, your checking balance drops to a specific level or when your credit card is approaching its limit.
You can also request your current balance by sending the bank a message code, like BAL, and get a quick response. By sending various codes, you can learn what checks have cleared recently or move funds to a linked credit card. Because the bank will accept instructions only from your phone, you don't have to worry about someone impersonating you unless you lose or loan your phone.
Be aware that some scammers send SMS messages purportedly from your bank, requesting your personal identification number, account number or other information. Any such request for information is almost certainly fraudulent. To make it easier to determine at a glance that text messages from your bank are authentic, add the bank's short code to your contact list under the bank's name.
Continued: Mobile Web and client applications
Rate this Article
High
