Mobility and Mobile Payments

Jeremiah Lotz, VP-Digital Experience & Payments, PSCU

Jeremiah Lotz, VP-Digital Experience & Payments, PSCU

As a credit union, having mobile capabilities is no longer an option. Credit unions today must offer and utilize a robust mobile solution in order to be in the game.

Chicken or the Egg

Much is made in the media today about why Apple Pay has not taken off as anticipated. This is a classic “chicken or the egg” conundrum. The journey started with building a phone with the technology and capabilities to be used securely at the point of sale. The next step was for stores to have POS terminals that accept Apple Pay, with the hardware and software to support the transactions. Users also need an Apple phone or Apple Watch that supports the service. We are now starting to see Apple Pay being used for payments on websites from users’ personal computers. The area of mobile payments is a complex ecosystem that will develop gradually over time.

“Technology will continue to provide us with new opportunities that make our life easier”

We have already seen financial organizations move toward supporting multiple digital wallets. In some cases, financial institutions have developed their own digital wallets. What we have not seen is a definitive indication of consumer preference for which digital wallet—or wallets—they favor. It will most likely be several years until a clearer picture develops.

The Next Generation

We are now in the next phase of the evolution of mobility. We have witnessed the development of many new financial services apps. We have also watched consumer expectations evolve from complex applications that serve a multitude of functions, to separate and simpler applications that serve a specific purpose. What is behind this evolution? It is about creating the best consumer experience possible with the end user in mind. It is about creating solutions that are convenient and easy to use. It is about serving a broad base of members with varying degrees of knowledge in how to use mobile. It is about being the mobile device app of choice.

Hardware itself continues to evolve. Phone designs have gone from small to large phones, and recent articles suggest foldable phones may once again be on the horizon. Would we have predicted several years ago that people would willingly pay nearly $1,000 for a phone? Probably not. But that price tag now seems reasonable given the many purposes phones serve in our everyday lives. They are particularly invaluable when it comes to saving time. Services on our mobile devices help us more effectively manage time through efficient applications with alerts, rewards, loyalty points, person-to-person (P2P) payments, account-to-account transactions, cardless ATM transactions, chatbots and more. We can now easily pay for goods and services in a matter of clicks, and the recipient receives the money in real time.

The Pace of Change

Saving time has become extremely valuable to us. Credit unions can maintain, grow or gain account relationships by building services through a mobile device that saves time. But it cannot stop there. It is also about fulfilling a diverse group of members’ needs, during a time when technology is changing at a rapid pace.

Technology in mobile continues to gain ground, offering more integration capabilities in response to increasing consumer demand. Mobile provides us with a sense of being in control. We now know instantly if there is a fraud alert on our account. We can check account balances whenever and wherever we want. We can go to lunch or dinner and share the expense with our friends or family, paying our portion in real-time. Mobile is fast and easy. It is always on, 24/7.

Mobile solutions and apps that allow users to better manage their finances and financial health in general are emerging. New fintech companies continue to seek investments for their solutions, pushing innovation and new opportunities to create new experiences and find niche markets. We continue to challenge ourselves as consumers evolve and want more.  

What we can do with technology, the integration of services and evolving the member experience is still very much in its infancy. Mobile investment is therefore expected to increase in the coming years as we strive to keep up with the pace of this change.

Coming Soon

The future holds much promise when it comes to developing solutions that incorporate biometrics like selfie pay, beacon technology, machine learning, artificial intelligence, and predictive analytics to use information in more meaningful ways. These technologies and solutions will not be invasive, but rather will come to be expected by consumers. Technology will continue to provide us with new opportunities that make our life easier.

Many of us grew up with now nearly obsolete landlines and dial up Internet. We have seen online banking morph from PC-based sites to responsive web apps on mobile devices. Our children, on the other hand, grew up knowing that a phone is portable and can be used for many things—playing games, talking to friends and family whenever and wherever they want, texting. Facetime conversations are normal to them. We will see more changes in mobile as time goes on. The mobile device of today will look different in five or even three years as we see hardware vendors compete in the marketplace.

How can credit unions even hope to keep up? We need to continue to emphasize the value of mobile banking to members. We need to use it ourselves. Try a digital wallet so we can all talk about and share our experiences. We should solicit member feedback on what they perceive as value-added solutions and can only do that if we use these solutions ourselves. Credit unions that want to create a memorable member experience can do so through mobile, for everyone from baby boomers to millennials. And let us not forget Generation Z—many of them are paying off student loans and are in desperate need of financial services and solutions. Credit unions need to be there for them today and in the future. Mobile is the answer.

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