With just six taps of a smartphone, Washington State Employees Credit Union (WSECU) members can apply for a short-term loan—and less than one minute later have access to as much as $4,000.
That combination of speed and simplicity in the competitive mobile lending marketplace has quickly paid dividends for the $1.9 billion asset credit union in Olympia, Wash.
WSECU members can apply for a pair of established products: a “Q-Cash” loan of $50 to $700, with a 60-day term; or a “Q-Cash Plus” loan of $701 to $4,000, with terms ranging from nine to 36 months.
The credit union introduced its Q-Cash loan a decade ago after a teller reported many members were writing money orders to predatory lenders, and it added Q-Cash Plus in 2012.
These loans remain available through traditional and online channels, but WSECU members clearly enjoy the mobile option. Right after the May 15 launch, WSECU received 20% of its applications through that channel— without push from marketing or advertising.
Those results reinforced CEO Kevin Foster-Keddie’s belief in mobile lending. By year’s end, WSECU plans to market a commercialized version of its Q-Cash platform that other credit unions can customize.
“Mobile is not for all members, but we believe it will be a major part of the way many consumers expect lending services to be delivered,” says Foster-Keddie, who foresees auto lending as the next mobile loan frontier.
Proprietary algorithms that power nearly instantaneous underwriting represent the disruptive element of WSECU’s mobile lending efforts.
“Speed is everything,” says Foster-Keddie, who also preaches continuous product improvement based on member feedback.
Q-Cash charges range from $10 to $12 per $100 obtained, and Q-Cash Plus carries a 36% interest rate—a far cry from those of predatory lenders.
Also, many members who take out these loans migrate to customary unsecured personal loans after building a reliable credit history, Foster-Keddie says.