Three Features That Will Change Mobile Money

Mobile data promises much deeper member relationships for CUs that invest well.

November 5, 2012

We upgraded our phones because of Mint.

First, some background: My wife and I, longtime smartphone users, have been on the mobile bandwagon ever since the Motorola Razr (remember the one that flipped open?) was the coolest tiny metal thing on the market.

But this last year we eased into a comfortable lull, me with my iPhone 4; her with an aging, second-generation iPhone.

Sure, Siri seemed like pleasant company and the newest headphones would be nice. But did we need them? No.

That is, until we realized that, the singular nexus of our financial lives, would not run on her older handset. That was a big deal.

Because with money flowing in on payday and out through too many ACH debits, bill pays, paper checks, and savings transfers to count, we needed to know how much we had.

It was not enough to view checking account balances twice a week. We wanted to know at Target, at truck stops, and at Toys ‘R Us how much we have now. So we upgraded.

And now that she has Mint on her phone, too, she encourages me to feel guilty before we have to transfer funds from savings.

The Rogers family’s rush to Mint probably doesn’t mean that all your members are right behind. But it does preview the larger trend: interacting with money in the moment.

Money, in both its spending and savings flavors, is inherently mobile. Few of us make money decisions as our best rational selves in front of a computer screen and a spreadsheet.

We make them when we blow our budget at the car dealership, when we decide to bypass the candy counter and save a couple bucks, or when we comparison shop right in the store.

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Mobile data allows members to check balances, sure. But it also promises much deeper member relationships for the credit unions that invest well.

Filene’s “The Future of Member-Facing Technologies in Credit Unions" points toward three services that will tie mobile members to their credit union:

►Location awareness. The goal of location-aware applications is to provide users with information based on the context of the situation or location they’re in. The apps rely on GPS (global positioning systems) or triangulation through radio or cell stations to determine the current location of the user.

Location awareness technology is expanding beyond outdoor location identification to indoor identification with the help of Wi-Fi, beacons, and proximity tag technologies.

Consider helping members find the nearest fee-free ATM or sending them an auto loan offer when they walk onto a car lot.

►Augmented reality. Not to be confused with virtual reality, augmented reality builds on location awareness to create new capabilities.

Wikipedia defines augmented reality as “a live direct or indirect view of a physical real-world environment whose elements are augmented by virtual computer-generated imagery.”

Why not partner with Zillow or a similar service to let members take a picture of a house, get its price—and then a home loan offer to go with it. Australia’s Commonwealth Bank is already there.

Mobile payments. More prevalent outside the U.S., mobile payments are gaining mindshare here with the growing popularity of smartphones.

Four technologies enable mobile payments:

  1. SMS text messages sent by a consumer to a short code, resulting in a charge to the phone bill;
  2. Direct mobile billing, where a consumer uses the mobile billing option during check-out at an e-commerce site;
  3. Mobile web payments that use the wireless application protocol (WAP), and
  4. Contactless near field communication, which is used mostly for purchases made in physical stores or transportation services.

Patelco Credit Union has offered one such service for years, and Filene research shows that more than half of all credit unions will be investing in person-to-person systems in the coming year.

BEN ROGERS is research director for the Filene Research Institute.