Mobile payments have gone from a novelty to a game-changing customer interface in just a few years, according to the 2013-2014 CUNA Environmental Scan.
In fact, IDC Financial Insights predicts global mobile commerce will surpass $1 trillion in 2017.
The stars are in perfect alignment for mobile payments to continue this growth. Smartphone sales are outpacing sales of feature phones and personal computers—a trend that emerged near the end of 2010 and will only continue to grow.
Through 2016, smartphone growth is expected to continue at an 18.3% compound annual growth rate.
The popularity of iPads and similar devices provides further support for the mobile payments trend, particularly among younger consumers—credit unions’ future members.
According to the CUNA Environmental Scan, credit unions thinking about increasing their involvement in mobile payments should consider their:
►Commitment. Senior management must have more than a passing interest in mobile; it must show a strong commitment.
If your credit union doesn’t have in-house expertise, it should seek that expertise from a trusted third party.
►Strategy. Executives must decide how to integrate mobile payments into their overall strategy because mobile devices ultimately will become the primary way for members to interact with their credit unions.
As a cross-channel enabler, mobile will influence every other delivery channel—branch, contact center, ATM, and online banking.
Your strategy should leverage the power of mobile to deliver personal financial management tools and relevant ads and offers at the point of sale.
►Priorities. Mobile payment options can be grouped in three priorities: credit union-branded, retailer-branded, and third-party intermediaries. All three are likely to co-exist.
Credit unions should focus first on their own branded service for member accounts in their own mobile banking app.
Only by enrolling members and promoting this service early can credit unions gain member engagement and loyalty to the credit union brand.
►Partners. Investigate a vendor’s vital signs to make sure it’s well-funded and will be around for the long-term.
Also, make sure the vendor’s business model and philosophy aligns well with your credit union’s overall strategy and reinforces its brand.
An inflection point
Credit unions find themselves at an inflection point in the payments industry.
New technologies have made it possible to replace the current payments infrastructure with mobile devices and low-cost, off-the-shelf hardware and open software solutions.
This inflection point creates an opening for credit unions to redefine the payments infrastructure in a way that eliminates or reduces third parties’ control over the infrastructure deployed in their members’ hands and used at retail locations.
As credit unions help redefine payments, they can reduce costs, increase new revenue streams, and create a better experience for members.
Consult the 2013-2014 CUNA Environmental Scan Report for more information.