Virtual payment services are being developed so
rapidly that they are poised to change the world of personal finance—but why. And what does this mean to credit
The short answer to the first question is that consumers have changed. Today’s consumer has a kaleidoscope of options to access their most critical, need-on-a-daily basis data: their contacts, their calendars, their photos and videos, and their finances. With technology, people can connect instantly – and they do. Mobile devices might as well be an extension of consumers’ arms.
It’s no wonder that consumers want to connect with their money differently as well.
In the same way that people once wouldn’t dream of leaving the house without a traditional wallet, they’re now looking at navigating the world with digital wallets. By storing and maintaining this information digitally, consumers can access and use their payment tools wherever they want – whether at a virtual place like a shopping site or a traditional retailer with the technology to process these payments.
Payments are a natural priority, but they’re also an area of concern, as consumers and financial institutions alike worry over the security of digital payments.
It’s easy to see how these emerging payment tools are going to grow in importance, but this still remains an emerging opportunity. Most people aren’t already dedicated to a particular option. And no one has launched a multi-institution, multifunctional “killer” app in this category.
If you look at the types of activities consumers want on the fly, they’re fairly straightforward:
- They want to be able to check their balances and account histories, to see what’s going on with their accounts.
- They want to be able to transfer money between their accounts.
- They’d like to transfer money to a friend, even if that friend has an account at another financial institution.
- They want to deposit checks remotely—no visiting a branch or ATM.
- They’d like text alerts when something significant is happening.
- And they’d like to be able to pay their bills digitally.
"And, so what does this mean to credit unions? They are actually in a good position to capitalize on these changes."
And, so what does this mean to credit unions? They are actually in a good position to capitalize on these changes. This is because credit union members already enjoy access to technology above and beyond what the average bank customer has:
- More credit union members use online banking three times or more per year—73 percent versus 70 percent for large national banks.
- Credit union members are much more likely to say their financial institution does an excellent job of providing innovative technologies—60 percent versus 49 percent for big banks.
- 85 percent of credit union members say their credit union is excellent at providing online and mobile access.
Clearly, credit unions are already doing a good job of providing online and mobile convenience to their members. And that’s a great position to be in as our society moves into the world of emerging payments.
Diane Zablit is Senior Marketing Manager, Mobile/Virtual and Interactive, with CO-OP Financial Services, Rancho Cucamonga, Calif. Zablit can be reached at firstname.lastname@example.org and (800) 782-9042, ext. 6166.