People now use an app on their smartphone to make payments. Fig. 5.1 shows the amount of mobile wallet users from 2016 to 2021. [Figure 5.1 Bar chart showing mobile wallet users in millions from 2016 to 2021, with values: 2016: 670, 2017: 799, 2018: 945, 2019: 1098, 2020: 1246, 2021: 1381] Use Fig. 5.1 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

1. [2] (a) 582 (2) Method: 1381 – 799 (1)
2. [2] (b) Increase in mobile shopping / ecommerce / global online trading; Increase in security; More people have smartphones; Wide use of the internet/digital technology; More convenient than carrying multiple plastic cards or cash; Cheaper than going to a bank; Convenience / can bank at home / anytime / 24/7; Can bank anywhere; Less people paying by cash/cheques / increase of cashless society; More locations/globally/websites accept mobile payments; Speed of payment; Safer than carrying cash; Eliminates paper/ink; Loyalty rewards are offered; Banks promoting digital technology
3. [3] (c) Yes - Fewer bank branches needed (1) more people use/have access to digital/internet/mobile banking (1) offers most of the services that a bank branch does (1) many new banks are only app-based (1) makes life easier for customers e.g. no need to queue at till / for a face-to-face meeting (1) cheaper than going to the bank (1) more efficient for customers (1) fewer staff needed to serve customers in bank branches (1) as teller transactions have declined (1) this reduces labour costs (1) reduces cost of premises (1) possibly increasing profits (1) greater customer satisfaction from using digital banking (1) some customers prefer the benefit of instant access to their bank accounts/ ability to carry out transactions 24/7 (1) at home/wherever they are (1) saving them time (1). No - branches still have to be used to withdraw large amounts of cash (1) some people prefer to use ATMs in branches or branch lobbies than e.g. in supermarkets (1) some people prefer face-to-face contact (1) e.g. open a new account / apply for a loan / advice on a new product (1) still used to pay in cash/cheques (1) concerned about being scammed/hacked (1) money taken from their accounts (1) some consumers are challenged using technology (1) example (1)
4. [3] (d) Hire purchase payments are made by instalments. (TRUE); A store card is a type of savings account. (FALSE); A credit card is a way of borrowing money. (TRUE)
5. [6] (e) Communication is the way that information is passed between people. Failure to communicate effectively leads to poor communication. Banks use a variety of written, verbal and electronic communication methods with customers. If banks communicate inaccurately with customers, e.g. an inaccurate bank statement, they will lose customers; Leads to unsatisfied customers with more customer complaints; Will affect brand image damaging banks reputation; Leads to lack of trust with customers deciding to bank elsewhere; Poor communication from the bank management to its staff will lead to inefficient service, mistakes, customer complaints and the reputation of the bank being damaged; Customers expect accurate communication and need to trust what the bank tells them, e.g. the rate of interest on a loan, if customers are not satisfied, they will not take out loans or use other bank services; Customers expect quick movement of information / prompt carrying out of instructions, if not the bank will be considered inefficient, leading to poor customer satisfaction; Many customers want mobile facilities to check their accounts – if the technology malfunctions, customers will feel that the bank is unreliable and decide to bank elsewhere. Evaluation: Poor communication will result in a bank that is unaware of its customer needs so is unable to meet their requirements. If a bank does not communicate effectively with its customers, they will simply stop using them. That results in loss of bank revenue, leading to lower profits and less chance of survival in a highly competitive industry. The biggest implication is that is so easy for customers to change banks, they can do it all online in a few minutes, so good lines of communication are even more vital to the success of a modern bank.