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Nonbank tech giants gain consumer trust

Owning “cool,” can they eclipse banks on trust and privacy too?

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Nonbank tech giants gain consumer trust

Apple, Google, Amazon, PayPal-eBay, and Facebook—what Javelin Strategy & Research calls the “Gang of Five”—are uniquely suited to dominate mobile wallets in the mobile-social tech cycle.

In a recent analysis, Javelin concludes that over the past three years, the Gang of Five has moved up significantly in consumers’ perception of trust and privacy. Javelin believes trust in the Gang of Five as a group has grown so rapidly that it is now eclipsing trust in the payment networks—Visa, MasterCard, American Express, and Discover.

Consumer perceptions of trust and privacy protection related to banks and payment networks declined during the past three years, crossing paths with the Gang of Five. Consumer trust in the aggregated Gang of Five increased from 45% to 80% over the past three years. Similarly, perceptions of privacy protection from the Gang of Five increased.

Trust Increasing GangofFivebrands declining Banks

“If these trends continue, the innovators’ need for a bank or network partner for mobile wallets begins to vanish and the door opens to disintermediation,” said Mary Monahan, research director, mobile, at Javelin. “Financial institutions need to identify strategic technology partnerships with these hot visionaries and get back to basics with what the core consumer wants from a mobile wallet—trust and privacy.”

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