Transactions over the internet are nothing new, online money transfer has been a part of our lives for years now. Most of us millennials, won’t even remember a time when stepping out without cash wasn’t an option. Our phones have now successfully become our wallets, but can they be our banks too? When I say banks, I don’t mean a pathway for you to connect to your actual bank but your bank itself. This is a rather new concept, especially for people residing in India, but it is possible. A Mobile-Only Bank enables you to make your Mobile or Tablet a bank, using an app of course. Let us learn more about it through a comparison of Mobile-Only Bank versus Traditional Banks.
How is a Mobile-Only Bank different from a Traditional Bank?
Reading the introduction, you would have thought that your Traditional Bank also lets you convert your mobile to a bank through internet banking. However, Mobile-Only Banks are not any physical banks offering online services, they are based entirely on your phone. This simply means they don’t have physical branches and everything from creating your account to putting money into your account is done online.
How to Get Started with Mobile-Only Bank?
You might already be aware of the procedure for opening a bank account in a Traditional Bank. This requires you to physically verify your identity by visiting a bank branch with the necessary documents. Though, opening a Mobile-Only Bank Account could be an entirely different experience all around. Most Mobile-Only Banks make use of virtual verification of personal identity than a physical one. This translates to a KYC by submitting the necessary identity proofs and some kind of live camera proof, like a photo or a video. So, to open your own Savings account in a Mobile-Only Bank, you need to first sign up and then get your KYC done. A selected Mobile-Only Bank might require a physical verification, which could involve a home visit or the user commuting to any of their agents.
What about Debit Cards?
The best thing about having a bank account is owning a debit card and swiping it. If you were worried that Mobile-Only Bank would keep you away from this luxury, you are wrong. Just like a regular bank, a mobile bank will also provide you with a debit card that can be used for transactions and withdrawing money. They offer a free digital debit card when you successfully open an account, but you can always go for a physical one by applying for it and paying a nominal fee. A Mobile-Only Bank might offer more deals and discounts on their cards as compared to any traditional bank.
Transferring Money in Mobile-Only Bank versus Traditional Banks
So, here is where you’ll find a major difference between the two. While both mobile and traditional banks allow you to transfer money online banking and using debit cards. Mobile-Only Bank does not have the facility to deposit money into them offline. So, if you earn in cash and then deposit the same into your bank account by visiting a banks branch, then Mobile-Only Bank is not for you. While you can use it by transferring money from your main account to your mobile account if you want.
If you compare the fee charged by Mobile-Only Bank versus Traditional Banks on your visit abroad. You might be delighted by the mobile banks as they charge a really low amount on such transactions as compared to traditional banks. However, the tables turn completely with ATM charges. As the fee charged by Mobile-Only Bank on withdrawals is way more than any traditional bank.
While a bank on a phone seems highly accessible, it is not in reality. This is because of the limited options that users have to choose from. While they may find branches to various banks in their vicinity, it might be hard to find various Mobile-Only Bank operating in their country. Especially if that country is Indian. Despite that, if you are fine with the limited number of options in the market, you won’t have any problem accessing any bank related service on Mobile-Only Banks. They even allow you to contact customer support with the ease of texts and calls.
In conclusion, Mobile-Only Bank versus Traditional Banks doesn’t have a straight-up winner. You will have to choose one, or both according to the benefits it offers to you.