Summer 2015
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N
Tips on Choosing and
Using Bank “Rewards”
ALSO INSIDE
Mobile Banking and Payments
At the ATM
Establishing or Rebuilding
Credit Scores
A Forward Look at
Reverse Mortgages
Answers to Deposit Insurance
Questions
F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N
Tips on Choosing and
Using Bank “Rewards”
ALSO INSIDE
Mobile Banking and Payments
At the ATM
Establishing or Rebuilding
Credit Scores
A Forward Look at
Reverse Mortgages
Answers to Deposit Insurance
Questions
2Summer 2015FDIC Consumer News
Mobile Banking and Payments: New Uses for
Phones...and Even Watches
Mobile banking allows consumers to
use their mobile phones to perform
transactions they might otherwise
conduct from their personal computers
or at a bank. Similarly, mobile payments
enable consumers to use a mobile
device to transfer funds to another
person (sometimes referred to as
person-to-person, peer-to-peer or
“P2P”) or to pay for goods or services
at retail locations. Here’s a look at
recent developments in mobile financial
services for bank customers.
Mobile banking is popular. A recent
survey by the Federal Reserve Board
concluded that, as of December 2014,
about 81 percent of U.S. banks offered
mobile banking services to their
customers and that one-third of their
customers used these services. The
overwhelming percentage of banks
offering mobile banking is driven, in
part, by the 87 percent of U.S. adults
who own a mobile phone, of which
71 percent are smartphones. Also
according to the study, 15 percent of
online banking customers accessed that
service exclusively through their mobile
phones.
The survey also showed that the most
common use of mobile banking (by 94
percent of consumers who use mobile
banking) is to check account balances
and recent transactions. In addition,
half of mobile banking users have
deposited a check by taking a picture of
it with their phone.
If you are interested in mobile banking,
many financial institutions offer mobile
banking applications (apps) that you
can download to your phone or have
websites that are specially designed to
be viewed on a mobile device. Banks
and other companies also may offer
apps that help consumers more closely
manage their finances by keeping
track of their spending, purchases and
savings.
Mobile payment services can offer
convenience and security. “Paying
by smartphone can be more secure
than swiping your credit or debit card’s
magnetic stripe card in the terminal
because the merchant never sees your
actual card number and all the sensitive
payment information is encrypted,” said
Jeff Kopchik, a Senior Policy Analyst
with the FDIC.
Using your smartphone to make
purchases at stores or restaurants is
generally a two-part process. First,
determine if your smartphone has a
mobile wallet app you can use to link
to one or more payment methods to
make payments with your phone. If
it does not, download one from your
bank’s website or other reputable app
marketplace. Second, enroll in the
service with your bank and specify
which credit or debit card will be used
to pay for purchases.
To use your mobile phone to pay at
a store, place it next to a compatible
terminal located on the checkout
counter and either enter your personal
identification number (PIN) or use the
phone’s fingerprint reader (if it has one).
For more about using your smartphone
to make payments at retail locations, see
our Winter 2015 issue (www.fdic.gov/
consumers/consumer/news/cnwin15/
paybysmartphone.html).
As for person-to-person payments, as
long as you and the other party are
enrolled in the same P2P service, you
can send the money by simply entering
the recipient’s mobile phone number
and the amount you want to transfer. continued on the back page
Simple Steps for
Safe Mobile Banking
While mobile banking and payments
can be convenient, FDIC Senior
Policy Analyst Jeff Kopchik said
consumers should always take certain
precautions. For example:
• Make sure that access to your
mobile phone is protected by a
personal identification number
(PIN) in case the phone is lost or
stolen;
• Only download mobile banking
and payment apps from your bank’s
website or another reputable app
marketplace;
• Consider installing anti-malware
software on your phone. Your bank
may provide this software for free;
• Monitor your transactions
regularly so that you can spot and
report fraud to your bank right away;
• Before using a mobile device to
connect with your bank from a
public area, such as a coffee shop or
an airport, always check to make sure
that you are connecting using your
cellular service and not an unsecured
public Wi-Fi network; and
• Contact your bank with any
questions you have before you
sign up to use mobile banking or
payments.
“P2P can be much more convenient
than trying to find an ATM in your
bank’s network that doesn’t charge fees
for withdrawing cash,” said Elizabeth
Khalil, a Senior Policy Analyst with
the FDIC’s Division of Depositor and
Consumer Protection.
Before using any P2P service, also make
sure you understand whether any fees
will be charged.
High-tech wristwatches are
becoming fashionable for some bank
customers. A few large banks have
created financial apps for smartwatches
that allow their customers to read
messages from the institution or access
basic services by just glancing at their
wrist. “For example, a smartwatch could
send you an alert if you are nearing the
B A N KING ON THE GO
Mobile Banking and Payments: New Uses for
Phones...and Even Watches
Mobile banking allows consumers to
use their mobile phones to perform
transactions they might otherwise
conduct from their personal computers
or at a bank. Similarly, mobile payments
enable consumers to use a mobile
device to transfer funds to another
person (sometimes referred to as
person-to-person, peer-to-peer or
“P2P”) or to pay for goods or services
at retail locations. Here’s a look at
recent developments in mobile financial
services for bank customers.
Mobile banking is popular. A recent
survey by the Federal Reserve Board
concluded that, as of December 2014,
about 81 percent of U.S. banks offered
mobile banking services to their
customers and that one-third of their
customers used these services. The
overwhelming percentage of banks
offering mobile banking is driven, in
part, by the 87 percent of U.S. adults
who own a mobile phone, of which
71 percent are smartphones. Also
according to the study, 15 percent of
online banking customers accessed that
service exclusively through their mobile
phones.
The survey also showed that the most
common use of mobile banking (by 94
percent of consumers who use mobile
banking) is to check account balances
and recent transactions. In addition,
half of mobile banking users have
deposited a check by taking a picture of
it with their phone.
If you are interested in mobile banking,
many financial institutions offer mobile
banking applications (apps) that you
can download to your phone or have
websites that are specially designed to
be viewed on a mobile device. Banks
and other companies also may offer
apps that help consumers more closely
manage their finances by keeping
track of their spending, purchases and
savings.
Mobile payment services can offer
convenience and security. “Paying
by smartphone can be more secure
than swiping your credit or debit card’s
magnetic stripe card in the terminal
because the merchant never sees your
actual card number and all the sensitive
payment information is encrypted,” said
Jeff Kopchik, a Senior Policy Analyst
with the FDIC.
Using your smartphone to make
purchases at stores or restaurants is
generally a two-part process. First,
determine if your smartphone has a
mobile wallet app you can use to link
to one or more payment methods to
make payments with your phone. If
it does not, download one from your
bank’s website or other reputable app
marketplace. Second, enroll in the
service with your bank and specify
which credit or debit card will be used
to pay for purchases.
To use your mobile phone to pay at
a store, place it next to a compatible
terminal located on the checkout
counter and either enter your personal
identification number (PIN) or use the
phone’s fingerprint reader (if it has one).
For more about using your smartphone
to make payments at retail locations, see
our Winter 2015 issue (www.fdic.gov/
consumers/consumer/news/cnwin15/
paybysmartphone.html).
As for person-to-person payments, as
long as you and the other party are
enrolled in the same P2P service, you
can send the money by simply entering
the recipient’s mobile phone number
and the amount you want to transfer. continued on the back page
Simple Steps for
Safe Mobile Banking
While mobile banking and payments
can be convenient, FDIC Senior
Policy Analyst Jeff Kopchik said
consumers should always take certain
precautions. For example:
• Make sure that access to your
mobile phone is protected by a
personal identification number
(PIN) in case the phone is lost or
stolen;
• Only download mobile banking
and payment apps from your bank’s
website or another reputable app
marketplace;
• Consider installing anti-malware
software on your phone. Your bank
may provide this software for free;
• Monitor your transactions
regularly so that you can spot and
report fraud to your bank right away;
• Before using a mobile device to
connect with your bank from a
public area, such as a coffee shop or
an airport, always check to make sure
that you are connecting using your
cellular service and not an unsecured
public Wi-Fi network; and
• Contact your bank with any
questions you have before you
sign up to use mobile banking or
payments.
“P2P can be much more convenient
than trying to find an ATM in your
bank’s network that doesn’t charge fees
for withdrawing cash,” said Elizabeth
Khalil, a Senior Policy Analyst with
the FDIC’s Division of Depositor and
Consumer Protection.
Before using any P2P service, also make
sure you understand whether any fees
will be charged.
High-tech wristwatches are
becoming fashionable for some bank
customers. A few large banks have
created financial apps for smartwatches
that allow their customers to read
messages from the institution or access
basic services by just glancing at their
wrist. “For example, a smartwatch could
send you an alert if you are nearing the
B A N KING ON THE GO