Credit unions thinking about increasing their involvement in mobile payments should consider their:
• Commitment. Senior management must have more than a passing interest in mobile; it must show a strong commitment. If your credit union doesn’t have in-house expertise, it should seek that expertise from a trusted third party.
• Strategy. Executives must decide how to integrate mobile payments into their overall strategy because mobile devices ultimately will become the primary way for members to interact with their credit unions.
As a cross-channel enabler, mobile will influence every other member-interaction channel—branches, contact center, ATMs, and online banking.
Your strategy should leverage the power of mobile to deliver personal financial management tools and relevant ads and offers at the POS.
• Priorities. Mobile payment options can be grouped in three priorities: credit union-branded, retailerbranded, and third-party intermediaries. All three are likely to co-exist.
Credit unions would be wise to focus first on their own branded service for their own member accounts in their own mobile banking app.
Only by enrolling members and promoting this service early can you gain member engagement and loyalty to the credit union brand.
• Partners. Investigate a vendor’s vital signs to make sure the vendor is well-funded and will be around for the long-term.
Also, make sure the vendor’s business model and philosophy aligns well with your credit union’s overall strategy and reinforces its brand.
What type of service-level commitment will the vendor make? Will it ensure the mobile payment app continues to function, particularly at peak times, such as Black Friday or Cyber Monday?
An inflection point
Credit unions find themselves at an inflection point in the payments industry.
New technologies have made it possible to replace the current payments infrastructure with mobile devices and low-cost, off -the-shelf hardware and open soft ware solutions.
This inflection point creates an opening for credit unions to redefine the payments infrastructure in a way that eliminates or reduces third parties’ control over the infrastructure deployed in their members’ hands and used at retail locations.
As credit unions help redefine payments, they can reduce costs, increase new revenue streams, and create a better experience for their members.
Adapted from the 2013-2014 CUNA Environmental Scan Report.
RICHARD CRONE is CEO/founder of Crone Consulting LLC. Contact him at 650-740-5239.
HEIDI LIEBENGUTH is managing partner at Crone Consulting LLC. Contact her at 650-740-5253.
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