IBM RELEASED SIMON, THE FIRST mobile phone, in 1994.
It sold 50,000 units. At $900, with a one-hour battery life, Simon featured not just voice communications but fax and email capabilities. It included other applications, too, like an address book and calendar function.
Mark Sievewright, Fiserv’s president of credit union solutions, shared this bit of history when he spoke to volunteers this summer. In the next 10 years, he said, expect to see profound changes driven by technology—beyond what anyone can imagine today.
He was one of many presenters who also gathered at the joint CUNA Technology/Operations, Sales & Service Council Conferences this fall. The event, held shortly after Apple announced Apple Pay—its digital wallet solution for the iPhone—had conference organizers responding with a special breakout session that brought credit unions and payments experts together to discuss this latest disruptor.
Many have long anticipated Apple’s entrance into the payments arena. But credit unions are wondering what effect Apple Pay will have on their already shrinking interchange revenue. Conference presenters said Apple will charge 15 basis points—and the major card companies will levy additional fees for tokenization and processing.
Several payments providers want to provide credit unions access though. “We think it’s going to be a big hit,” Caroline Willard, executive vice president of markets and strategy for CO-OP Financial Services said.
It’s doubtful Apple’s payments service will go the way of Simon, even though some observers are waving the caution flag. More secure technology might come along, and no payments option will take off without critical mass of access locations and consumer interest.
Apple’s iPhone 6 comes with near field communication (NFC), which will allow tap-and-go payments at the reported 220,000 merchant locations ready to support Apple Pay. But competitors also support a large Android market, which Apple Pay doesn’t.
For now, Apple Pay is just one more moving part in a rapidly changing payments landscape.
If the impromptu session at the joint CUNA Council conferences was any indication, however, credit unions are paying close attention.
That’s a good strategy, says Sievewright, who suggests being “fast followers. This might mean you’ll have to strike deals because you can’t do it yourself.”
So, if you choose partners, he adds, “Think forward and not backward. Who’s going to get you where you want to go for your members?”
READ MORE COVERAGE FROM THE CUNA TECHNOLOGY/OPERATIONS, SALES & SERVICE CONFERENCES ON P. 12, P. 44, OR AT creditunionmagazine.com