Bob Hackney

The state of CU payments

Three themes to watch at CSCU’s Solutions Conference this week.

April 21, 2016

Millennials, mobile payments, and credit portfolio management are three themes to track at the 2016 CSCU Solutions Conference, according to Bob Hackney.

CSCU’s president gave more about 350 attendees that scoop as he kicked off the card processor’s annual gathering Wednesday afternoon in Orlando.

The state of payments is dynamic and challenging, Hackney noted, urging credit union leaders to keep pace by:

Understanding millennials

Millennials--those born roughly between 1980 and 2000--are the largest and most diverse generation in history.

“They’re different” and you need to grasp what’s important to them, Hackney said, not only as members but as employees.

Some quick facts about millennials:

  • 52% are homeowners
  • 47% are parents; and
  • 36% have a household income of less than $75,000 per year.

Millennials are also big on social media and want financial advice, he said. Furthermore, millennials led the way in boosting mobile transactions to exceed branch transactions.

“You can’t talk about millennials without talking about smartphones,” Hackney said.

Pushing mobile payments

Last year at the conference, the financial services world was in a buzz about the newly released Apple Pay mobile payments solution.

A year later, numerous other competitors are in the marketplace including Samsung Pay and Android Pay. But adoption is “slow going” and use is “hit and miss,” Hackney said.

But mobile payments will grow over time.

Why hasn’t a sea change in payments occurred? Consumers are satisfied with using their plastic cards, they're not familiar with mobile payment solutions, they have security concerns, or they worry about store acceptance, he said.

Clearly, consumers “lack a compelling reason” to switch their current payment methods. “In order for mobile payments to get traction, we need a good rewards proposition,” Hackney said.

Managing credit portfolios wisely

“Don’t ignore basic credit line management,” Hackney said.

Take an active approach about managing your credit portfolio, look into VISA and MasterCard card programs, and use your consulting resources, he suggested.

“You have to always be doing something,” Hackney said.

Portfolio management may not have the same appeal as mobile payments, but it is important because all the new, exiting payments methods run on the existing rails, he said.

Credit lines and average balances have decreased, while volumes have increased just 1%, he said. Total income per account is down.

“We’re leaving money on the table,” Hackney said.

Other important themes to this year’s conference, Hackney said, include mobile banking, the Federal Reserve encouraging faster payments, blockchain technology, regulatory concerns, and the “Internet of things.”