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This article was taken from the August 2011 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
In the near future, your phone will become your electronic wallet and full-service bank -- just not in the traditional sense.
Mobile banking, aka mbanking, covers typical bank functions such as balance checks, transactions and transfers, peer-to-peer currency loans and exchanges, as well as "touch and go" payment systems. The smartphone is behind a massive reinvention of what banks are, transforming how we pay and redefining what we think of as "currency". In 2010 mbanking rose by 200 per cent in Kenya and by 100 percent in the US. Step aside, HSBC.
Five hot banking startups
TRANSFERWISE
Peer-to-peer currency exchange
Founded by Taavet Hinrikus and Kristo Kaarman, TransferWise charges £1 per transaction, regardless of the amount exchanged. The company expects to process about £30 million in 2011. transferwise.com
SQUARE
Smartphones become credit-card processors
Founded by Twitter creator Jack Dorsey, Square (WIRED 07.11) lets US users accept on-the-spot credit- card payments via their smartphone. The device is free; Square charges 2.75 per cent on every payment. squareup.com
BOKU
Payment using a mobile number
Boku turns your phone credit into currency. At the checkout, consumers can give their mobile number, reply to a text message to confirm the purchase and have the amount debited from their phone bill. boku.com
MONITISE
A full-service mobile bank
Monitise uses SMS, apps and browser technology to turn your mobile phone into a full-service bank, offering statements, withdrawals, transfers and payments. monitise.com
IZETTLE
Smartphones become credit-card processors
Like Square, iZettle (pictured) lets anyone take card payments, this time using their iPhone and an iZettle reader. The difference lies in the technology: Square reads the magnetic strip; iZettle, chip and PIN.
This article was originally published by WIRED UK
