Quicker Banking: Bank by Cell Phone

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FDIC Consumer News – Spring 2007 – Speed Pay Banking


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Speed Paying and Banking


Banking by Cell Phone

Most cell phones today enable you to do much more than simply make a call. New cell phones allow you to send "text messages" (brief e-mails) to other phones and computers, take still pictures and videos, browse the Web, watch TV and, increasingly, conduct some of your banking business.


Depending on the services offered by your financial institution (such as your bank or credit card issuer) and your cell phone service provider, the options may include:


  • Text messaging with your financial institution. This is the most basic level of cell-phone banking. It is commonly used for receiving alerts from your bank when your account balance reaches a certain level or when a certain transaction occurs. As with most text-messaging services, you may pay your cell phone company monthly or a per-message fee for sending or receiving these messages.
  • Accessing your online bank account from your cell phone. You may be able to check balances, pay bills and transfer funds using your cell phone to connect to your online bank account (after keying in your password). "Think of this as online banking but on a miniature computer with a smaller screen and more limited images and options," explained Nelson.
  • Instantly paying for purchases using your cell phone. Imagine going to the ball game, getting a hot dog from a vendor, using your cell phone to dial in to your credit or debit card account and immediately paying for your snack by sending a text message. "This form of mobile banking is mostly in limited use or in test stages, but as cell phones become equipped with special transmitter chips, there could be widespread use of phones for making payments," Saxinger said.

"Within the next couple of years," he added, "you may be using a cell phone to pay at checkout terminals and vending machines, send money to someone through a secure connection to your credit card or bank account, and even to download money (value) onto your phone."


If a cell phone is lost or stolen: Given how easy it is to lose a mobile phone, a consumer considering banking by cell phone should take some precautions. "First," Saxinger said, "make sure your bank requires a password or PIN to use a cell phone for banking. Also confirm with your bank that account numbers, passwords and other sensitive information are not stored on the phone, where they can be retrieved by a thief."


Saxinger also said that if you lose a cell phone that you used to do banking, you can take additional steps to protect against unauthorized access to your bank account. "Immediately contact your cell phone provider, which may be able to deactivate the phone or have sensitive information erased," he said. "Also consider calling your bank to find out about any additional precautions it may be able to take or what more you can do."


And what if a thief is able to obtain your password and then tap into your bank or credit card account? You'd have the same security protections and limits on liability as for other unauthorized electronic uses of your account. Contact your bank for more information.


Spring 2007 | High-tech cards and phones | Pre-Loaded Cards | "Contactless" Cards |
Banking by Cell Phone | Final Thoughts


FDIC Consumer News is published by the Federal Deposit Insurance Corporation


FDIC Consumer News is produced quarterly by the FDIC Office of Public Affairs in cooperation with other Divisions and Offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation of FDIC or other government regulations and policies. Mention of a product, service or company does not constitute an endorsement.


Find current and past issues of FDIC Consumer News at http://www.fdic.gov/consumernews. Refer to this same index to locate the issues that are specially formatted for being reprinted in any quantity.


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Last updated on 5/16/2007

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