NEW ORLEANS (6/2/15)--“The one who enrolls is the one who controls” is the mantra Richard Crone of Crone Consulting offered attendees of the CUNA Payments Roundtable in New Orleans on Monday.
By enrolling in mobile payments,consumers provide themselves not only with the ability to make payments but also with access to personalized shopping lists and histories, loyalty information, actionable digital coupons and other functionality. The mobile device provides a real-time link to their favorite retailers.
And while the payments environment may appear daunting to some credit union leaders, financial institutions--including credit unions--are well-positioned to capitalize on the wave of digital services transforming the marketplace, said Crone, who is facilitating the two-day roundtable.
That said, “signing up for Apple Pay is not a mobile strategy,” he said. “It’s unlikely a single player will own the digital wallet space.”
The best digital solution for credit unions is to provide a credit union-branded digital wallet. “At the end of the day, the safe bet is offering your mobile banking app accessing your accounts and reinforcing your brand,” he said. Crone warns that if a credit union doesn't provide that access, someone else will and that "will diminish your opportunity to add new information-based services through a mobile banking app.”
Credit unions will likely have to support multiple types of mobile payments, Crone said, but digital wallets will also offer opportunities for revenue income. For example, digital wallets offer a channel for retailers to reach the consumer, and a source of revenue for the digital wallet provider. Credit union-branded digital wallets would offer valuable ad space for retailers and a potential source of revenue for credit unions.
Crone pegged mobile advertising and purchase offer opportunities as two to three times greater than gross revenue for traditional card-based accounts.
“The real lift comes when your member engages with you and says, 'I want to do business directly with my credit union,' and you have a mobile wallet to offer them,” Crone said. “You want to get your fair share of this market, but you’re not going to get your fair share unless you have something to put in play. The safe play is your brand in your wallet.”
(See other stories from the conference: Shevlin: CUs can add value to mobile payments experience; CSCU’s Davis: Mobile payment sign-up process for FIs will get easier.)