The revolution will be more like an evolution, according to Denee Carrington, a mobile payments analyst from Forrester, writing in The New York Times.
In fact, the whole payments conundrum is something of a Catch-22—for consumers, tech companies, credit unions, and merchants.
More people would use a mobile payments solution if it were widely available, but merchants aren’t interested in installing new payments software and hardware unless there’ enough demand from shoppers, the Times says.
Karen Webster, CEO of Market Platform Dynamics agrees. In the payments race, consumers will decide who wins and loses. If they don’t see value in technology, they won’t adopt it—and neither will merchants.
But that doesn’t mean payments innovation will slow down, so pay attention, Webster told the CUNA Payments Roundtable last month.
“Creative destruction is the new norm,” she says. Technology is lowering the barriers to entry, and innovators have plenty of capital.
Those who ruled the payments industry for the past 50 years probably won’t lead the way going forward, Webster suggests. Apple and Amazon blew up the traditional recording and retail sectors, for sure. And disruptors looking to dominate the payments space today—third-party networks, collaborators, retailers, and apps—want to do the same to traditional payment networks and the interchange fees credit unions rely on.
These disruptors include Merchant Customer Exchange, ShopRunner, PayPal, BlueBird, and Walmart, to name just a few.
Today’s mobile strategy? “Fight to be sure your card is the one consumers turn to in the evolving payments ecosystem,” Webster says. That’s because the ecosystem will be less about a wallet than about commerce in general.
“You have a trusted relationship with your members—and you have the funding source,” she says. Protect these assets. Your strategy doesn’t necessarily involve taking on more risk, “but offering members new value and opportunities.”
Change marches to its own beat, she adds, which is a function of how quickly solutions become available and how many people with money adopt them.
CUNA’s compliance staff went back to basics in a recent CompBlog entry examining floor rates on variable-rate open-end loans. These rates are governed by the Credit Card Accountability and Disclosure (CARD) Act.