The magic of mobile person-to-person (P2P) payment technology is making consumers’ lives easier than ever, allowing them to transfer funds from one account to another using just a smart phone.
Consumer behavior is clearly changing due to P2P, with enormous fraud-related concerns for both the member and the financial institution. There is just as clearly a huge opportunity for credit unions in mobile payments technologies. It’s our time to grab that opportunity with both hands.
“Technology is virtualizing money,” said Ryan Zilker, business manager, product development for CO-OP Financial Services. “We have quickly gone from cash to cards and now to P2P transfers that allow us to send money instantly to anyone, anywhere. This market is growing fast, and there is a lot of push to get into it from several different directions.”
Companies such as PayPal, Square, Venmo and Facebook all offer P2P payment applications, as do several mobile service providers. While these applications make mobile payments fast and easy, they have their limitations.
“With products from PayPal, Facebook and Square, consumers are not able to view account information from within the app,” said Zilker. “To verify that enough funds are there to cover the transfer, they have to go into a separate banking application first. So the user experience isn’t entirely seamless.”
And, therein lies an opportunity for credit unions. Through CO-OP, credit unions can in fact offer a seamless P2P user experience right now.
Security with other providers is an issue, and yet another opportunity for credit unions: Consider also that Square, Venmo and other P2P payment providers share account information with third parties. “Security is the number one consumer concern over mobile P2P payments, and the law holds financial institutions to higher security standards than their competitors outside the industry,” said Zilker. “This alone represents a huge marketing advantage for credit unions.”
User experience and security are issues that CO-OP is devoting tremendous resources to addressing, and they are at the heart of what the company focuses on developing mobile payments products for credit unions and their members.
To that end, CO-OP has developed a suite of mobile solutions, including an advanced P2P payment app developed with today’s consumer in mind. With RealPay by CO-OP, balances update in real time, and transfers are completed at the speed of the plugged-in world. Recipients simply receive a message, input their information and access their funds. Funds arrive instantly both within the ever-growing RealPay by CO-OP network, with out-of-network transfers handled through ACH. To reduce settlement risks, a real-time good funds (RTGF) model ensures money is available.
CO-OP also offers CardNav by CO-OP, an app for managing debit and credit card usage. This solution allows users to restrict how and where their cards are used, all from their smart phones. Whenever a card is used in an unusual or unauthorized way, the system alerts the user by text, e-mail or phone message. In addition to setting limits on spending, users can temporarily deactivate – and reactivate – cards, and also specify which merchants, merchant types and geographic locations are approved for transactions.
“Our goal is to help credit unions provide a superior mobile experience for their members,” said Zilker. “CO-OP mobile solutions appeal to today’s tech-savvy consumer and position credit unions well for success in this fast-evolving market.”
According to Zilker, there are other important reasons to act now. “If your member is currently using Venmo, Square or another P2P payment system, then you as a credit union remain in the background, invisible to the user throughout these transactions,” he said. “Also, remember that providers such as Google generate their revenue from advertisers – by displaying relevant marketing messages to users. This means that instead of viewing information on your products and services during a P2P transfer, members are likely receiving ads from your competitors.”
He continued, “Marketing is all about reach and frequency. The good news is that this market is still up for grabs. Credit unions just need to step up and grab it.”
Related to this topic, the webinar MOVING FORWARD ON MOBILE PAYMENTS was presented by CO-OP on Wednesday, July 1, 2015. The recorded presentation in its entirety can be viewed, free of charge, here.