NEW ORLEANS (6/3/15)--During her presentation Tuesday at the CUNA Payments Roundtable in New Orleans, Caroline Willard, executive vice president of CO-OP Financial Services, offered a statistic that put the transforming emergence of mobile payments in eye-opening context: Mobile payments increased at a 59% growth rate in 2014.
For that reason, mobile payments continue to be the single greatest threat and opportunity for credit unions, Willard said.
“If I were still working at a credit union and designing products I would ask, ‘Where do I invest my time?’ Because that’s where members are spending their time and that’s where their expectations are regarding the [immediacy] of each of these channels.”
Indeed, consumers do want the immediacy of self-service and the convenience it provides. “The perception of self-service being a lesser service is not holding up,” Willard said. More than ever, consumers want self-service. There is a growing segment that wants to do its transactions at 2 a.m. and not have to talk to anyone to do it.
The other side of convenience is security. Much of mobile’s recent growth has been driven by tokenization, the fraud control mechanism used within Apple Pay, Willard said.
Also in play is the Oct. 1 EMV-standard deadline set by major card issuers. “We know that a lot of merchants aren’t going to be ready,” Willard said. “We also know a lot of financial institutions are not going to be ready."
Willard believes the launch of Apple Pay caused a lot of financial institutions to delay EMV implementation.
CO-OP has also empowered its members to manage their cards through a smartphone app. With their smartphones, members can turn cards on or off, limit locations where the card may be used, set transaction thresholds, specify transaction types and set alerts.
“Who knows better than members how their cards should be used?” Willard said.
From a strategic standpoint, Willard said, “We can’t let technology get too far ahead of us. Even though there’s not a great payback yet on mobile, we still have to go there. It can be something as simple as Apple Pay. It’s not the be-all end-all, but it’s one piece of the solution. You have to do the stuff that’s going to pay the bills, but you also have to offer some of the stuff that’s going to feel like R&D (research and development).”
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