They may be nice, but credit unions were conspicuously absent from the largest payments-related event in North America. Of the estimated 7,500 financial services and fin-tech executives in attendance, roughly 75 were from credit unions. PSCU, Co-Op Financial Services, and CSCU were understandably present. CUNA, CUNA Mutual, Credit Union Central of Canada, Credit Union Times, Filene, and the Michigan Credit Union League were also there. But of the 6,700 credit unions in America, only 29 were in attendance. Not a single Canadian credit union attended.
Timing, perhaps, is everything. With regulation and payments disruption being arguably the two most pressing external forces facing credit unions, it was interesting that this event was scheduled to take place on Election Day. Credit unions, it seems, voted with their feet. Maybe payments innovation only matters to a handful of credit unions. Maybe the industry is simply content to wait-and-see how everything plays out. Maybe when everything is amplified, we hear nothing. Or maybe this is simply a reflection of credit unions’ member-owned structure.
“The problem with these conferences is that everyone wants to see the new, sexy thing,” said Cardtronics CEO Steve Rathbarger. “Customers just want to be served.”
But how do they want to be served? BitCoin, Apple Pay, and CurrentC were predictably the hottest topics at the event, but each presents as many questions as answers. Is NFC too old of a technology to catch on in the United States? Will retailers adopt the technology en masse? Will the tokenization approach to POS transactions do a better job at preventing fraud than magstripes or chip-and-PIN systems? How does innovation in this space impact the push toward EMV? Will BitCoin go mainstream?
But the most important question that all of the recent payments “disruption” presents is this: “Do consumers really care?” Industry insiders have been predicting the death of cash and branches for so long, financial institutions actually convinced themselves that consumers demand a dramatically different approach. The boy cried wolf far too many times. Subsequently, financial institutions have been lulled into inaction on payments. Under-reaction can be just as devastating as overreaction.
Here’s what I know: plastic re-issuance due to retailer data breaches have unfairly hurt credit union finances and reputations; even if cash isn’t dead (it isn’t), online and mobile payments will only increase in numbers; and innovation in the payments space is fascinating.
What I don’t know is the extent to which consumers feel like there’s a payments problem. No doubt they want access to their money to be secure and convenient, and maybe that’s the most important insight of all. The onslaught of closed, proprietary payments solutions popping up feels more 1993 Microsoft than it does 2014 Dropbox.
The winners in the space will be the vendors, retailers, and financial institutions who realize that consumers want their payments process to be straightforward, consistent, and stress-free. The old days of wondering if a retailer accepts Discover or American Express are still here, only now the stress involves words like “BitCoin,” Apple Pay, and MDX. In many ways it feels like we are generating complexity, not relieving it. Our brains know that consumers want an industry standard. Our egos assume that our own solutions will become the standard. Sub-optimal consensus is a much more defensible position for financial institutions than the industry’s fragmented approach.
Worse, it seems like we are focused on all the wrong things. Saving five seconds off of the payments process or not having to pull out a card at the gas pump are, at best, incremental improvements to an uninteresting problem. The privacy issues addressed by Apple Pay and BitCoin are refreshing, but certainly not pressing. If all of this brainpower were spent on helping to extend more credit to consumers who have fallen on hard times, encouraging better instead of more purchasing decisions, or even making expense reports suck less, maybe we wouldn’t seem so out of touch with the pain points of the people we’re trying to serve.
Sadly, the Money 20/20 experience for me was much more Cirque Du Soleil than Google Maps. There was a lot going on — amazing feats of strength, careful orchestration, and acrobatics — but I still don’t know what it was all about. I, like all of you, simply want to know where to go. Maybe we just need to decide.
Matt Davis is the founder of gameFI, President of 6th Story, and co-founder of CU Water Cooler. He's a leading thinker, writer, speaker, and creator in the credit union world. He lives in Madison, Wisconsin, with his wife and two sons.
Side note, I manually counted the number of credit unions in attendance. Unless I missed one, here is the list of credit unions represented at Money 20/20: Mountain America, Ent, Teachers, Navy Federal, Numerica, Orange County’s Credit Union, Goldenwest, America First, TDECU, Local Government FCU (NC), Star One, Educational Employees, Spokane Teachers, Grow Financial, University of Michigan CU, Alliant, Verity, San Diego County, MIT FCU, One Nevada, DuPont Community, Boulder Dam, SEFCU, BECU, PSECU, Corporate One, WSECU, SECU (MD), and Logix,