MADISON, Wis. (5/29/15)--A new white paper from the Filene Research Institute explores the monumental shift taking place in the way consumers exchange money, and the implications for credit unions.
“Every aspect of how individuals and businesses manage, spend and borrow money is undergoing a fundamental and transformational shift,” said the paper. “At the heart of this change is the evolution of payments and financial services based on disruptive innovations in commerce at the intersection of key macro trends that include mobile, retail, marketingservices, data and technology."
The paper, “Payment and its Publics: Emerging Payment Systems and Reimaginings of Trust and Mutual Finance,” traces the growing list of options available for people to move, store and keep track of monetary value and how many new entrants use social media to drive the acceptance of new technology.
Most critical to credit unions, new entrants in the payments space are challenging the dominance of card networks and offering new methods for payment. “It will be critical to monitor the evolution of payment platforms in the coming years," the paper said. “Payment systems built in the name of community, such as PayPal, are often perceived as credit unions' ‘evil twin.’ They are a combination of interconnection and community alongside autonomy."
Also, new mobile payment technologies and the sharing economy often create semi-closed and privatized communities, such as PayPal, Uber or Starbucks. These closed-payment communities seek to provide the means for the circulation of value within a specific, circumscribed and bounded social domain.
The paper said credit unions should find it relatively seamless to collaborate with finance and tech startups because:
Credit unions can be a key resource for new payment entrants and, as a result, benefit from innovations in mobile finance, online banking and peer-to-peer accounting payment infrastructures, the paper said.