Money Transfers: Internet-Banking or Mobile Applications?

13.12.2015  

In the past decade a system of money transfers, which is widely-spread in our modern society, has been changed over and over again, this applies especially to the technological component of the process: there were introduced more and more new mechanisms of instant money transfers from one point of the world to another one. Several years ago launching of mobile and Internet banking was considered as an “innovative” discovery. What these two concepts mean?
Classic Internet-banking implies to the use of virtual personal cabinet opened for a client on a bank’s website, where a client uses various bank’s services. To access a personal cabinet you need a computer and Internet connection. Virtual personal cabinet allows virtual monitoring of all bank products, including accounts, deposits and cards. Moreover, with Internet-banking clients are able to transfer funds to any account or card of any bank, as well as to pay utility bills, mobile and Internet bills for specific commission fees.
Mobile banking represents a service of sms-notifications, which allows receiving in real-time information concerning any changes and operations related to client’s bank products. These two services help in carrying out various financial operations and monitoring them in real-time using a computer or a mobile phone with Internet access. It seems these are rather advanced instruments that allow quick solving of financial issues. However, time zips along and today more and more people shift to a new, even more futuristic service – money transfers via mobile applications.

Do mobile applications sweep market of money transfers?
With the advent of smartphones and cheap mobile Internet millions of people discovered unprecedented opportunities. Now there is no need to visit a bank or to have a computer at hand if you need to send money; the only thing you need is a smartphone with Internet access and a mobile application at your fingertips. In Russia this innovation appeared not long ago, that is why not all service providers included it into their range of services.
Nevertheless, in 2015 Bank Tinkoff, Bank of Moscow and Beeline offered mobile services. Most of mobile applications are arranged in a similar way: a client enters a number of his bank card and a number of a recipient’s card. Within several minutes, in some cases – several seconds, funds will be in a recipient’s account. According to experts, the key principle is downloading applications from official sources, such as Google Play or Appstore, and not from any other direct references.
Let’s see the advantages of mobile applications in the field of money transfers. Among these are:
1) Territorial mobility. It is an open secret that smartphones are not just elegant devices but functional gadgets which allow controlling if not the whole world, so at least somebody’s life: planning work and meetings, booking tickets, paying taxes and transferring money.
2) Low prices. Mobile Internet is inexpensive but it offers lots of benefits. Installing an application costs nothing to a user.
However, mobile applications have disadvantages due to the specific nature of the Russian market. According to the poll carried out by the National Agency for Financial Studies in the middle of November 2015, only 45% of population use smartphones while others do not own trendy devices. Therefore, the greater part of Russian population cannot appreciate advantages of using mobile applications for money transfers.

What is cheaper: Internet-banking or money transfers via mobile applications?
Currently, banks still offer the lowest commissions on money transfers. Mobile applications overrate commission by around 0,22 subpoints (in comparison with banks’ commission fees). In the strict sense, by the example of several banks and applications it looks as follows. Among banks the lowest commission (0.5%) is offered by the bank Otkrytie (Open Bank), the highest (2%) – by the bank Rosselhozbank. Among mobile applications the leader in offering the lowest commission is an application from Mail.ru under the name “From a card to a card” with 1.3% commission for money transfers. Tinkoff Bank offers an application with the same name with commission 1.5% from the amount of transfer. The highest commission 1.95% is taken by the application from Alfa Bank - «O! pр».
So, Internet-banking is still the most favorable instrument for money transfers, and in case of transferring large amounts it is the only reasonable instrument. As for mobile applications, at the moment the major advantage is the mobility of applications and independence from the locality of