When Apple CEO Tim Cook debuted Apple Pay—the company’s new digital wallet—last September, he declared it would forever change the way consumers shop.
Credit union leaders listened intently. And so did members.
“As soon as Apple Pay launched, we heard from members who wanted to pay using their iPhone,” says Tom Poe, vice president of remote services at National Institutes of Health Federal Credit Union (NIHFCU) in Rockville, Md. “This was not the case before. It’s certainly changed the conversation and increased overall member interest in mobile payments.”
Top financial services firms in the credit union industry immediately began assisting their credit union customers through Apple Pay’s enrollment process.
A few weeks after Cook’s announcement, the credit union industry’s tech crowd gathered at the annual CUNA Technology/Operations, Sales, & Services Council Conferences in Las Vegas. An impromptu breakout discussion on Apple Pay drew an overflow crowd.
The product’s user experience is impressive, says Michelle Thornton, manager of core products for CO-OP Financial Services.
“The beauty of what Apple has done is that it has taken pieces of technology that already existed in the market and turned them into a product that’s incredibly easy to use. The user interface is brilliant,” Thornton says. “It’s so simple, that I can see where people will use it instead of their cards.”
Even if Cook’s bold remark might still need some time to pan out, the Apple Pay question is captivating the credit union industry.
Why CUs enroll in Apple Pay
Early adopters, such as NIHFCU, jumped quickly on the Apple Pay bandwagon, primarily to:
• Satisfy members’ needs. Based on immediate feedback aft er Apple Pay’s announcement, NIHFCU anticipated high interest among its members—and potential members—in the health-care and biomedical professions.
The $560 million asset credit union serves all employees in a specific trade, industry, or profession within a defined geographic area. NIHFCU’s area includes District of Columbia, Virginia, West Virginia, and Maryland.
“For the most part, our typical members have very busy lives—many 24/7—requiring banking solutions that simplify their daily lives,” says Steven Levin, NIHFCU’s vice president of marketing. “During the past one to two years, the credit union made a concerted effort to upgrade its mobile services to meet the demand of our typical members, and Apple Pay was a natural extension of this effort.”
• Stay top of wallet. At UW Credit Union in Madison, Wis., the decision hinged on keeping the credit union’s cards as members’ preferred option in their digital wallets.
The $1.83 billion asset institution, which caters to college communities, sees 53% of its mobile banking logins originate from iPhones.
“Offering Apple Pay is one more way we can provide our members access to the latest mobile payment technology,” says David Mickelson, UW’s vice president of retail operations. “It will save members time, making their cards even more convenient to use at stores.”
Member reaction has been positive, he says. In the first two weeks aft er introducing Apple Pay to members, UW activated more than 2,500 debit and credit cards, he says. And the credit union expects the momentum to increase as members upgrade mobile devices.
• Enhance member security. In the wake of a slew of data breaches during the past year, the new payments technology should increase members “peace of mind,” says Kit Snyder, president/CEO of $518 million asset Consumers Credit Union in Kalamazoo, Mich.
Actual card numbers aren’t stored on the device or on Apple servers. Instead, Apple assigns, encrypts, and securely stores a unique “device account number.” Apple authorizes each transaction with a onetime unique dynamic security code, instead of using the security code that’s typically found on the back of most cards.
“We pride ourselves on helping people from all walks of life bank how they want, when they want,” Snyder says.
• Be an industry leader. Apple Pay was a right fit for FAIRWINDS Credit Union, based on Apple’s brand, reputation, and industry-leading delivery of the user experience, says Mathy Hogan, executive vice president of eBusiness.
The $1.76 billion asset institution in Orlando, Fla., makes it a priority to be at the forefront of the fastevolving mobile payments world.
“Innovation is very important to the credit union membership. Apple Pay allows FAIRWINDS to remain both current and relevant to our members,” Hogan says.
Technology continues to influence the way members stay connected both socially and financially, she says. And Apple Pay takes mobile payments to a new level of convenience and security.
NEXT Why CUs are waiting to enroll