WASHINGTON (5/7/13)--Mobile technology is here to stay and all evidence points to it having an increasing role in the payments ecosystem. Being at the center of members' payments is essential to the credit union's sustainability, relevance and competitiveness, reports a white paper commissioned by the Credit Union National Association's Community Credit Union Committee.
"The Future of Payment Systems for Credit Unions" was prepared by George A. Hofheimer, chief research and innovation officer at Filene Research Institute. (To access the full report use the link.) It outlines 12 trends in payments systems and offers tips for credit unions related to payments. They include:
- Understand what your members need.
- Take a holistic, collaborative approach to payments.
- Capitalize on physical assets such as brick and mortar.
- Leverage the power of payments data that can be gathered, mined and consolidated.
- Continue to cooperate with payments aggregators.
- Experiment and collaborate by taking advantage of credit unions' ability to work together.
To prepare, understand early (and sometimes weak) warning signs for disruptive innovation. Credit union strategists can:
- Critically examine adoption of technology being implemented. "The public relations departments of new payment technology firms are very busy today," said the report. "Innovations abound, and credit unions must cast a critical eye at these new entrants to understand what is real and what is vapor."
- Pay attention to the momentum in the payments ecosystem. Changes "will not occur overnight; therefore, keenly observe payments uptake by financial institutions, consumers, merchants, card associations, and processors. Traditional research tends to be late to the game on the topic of disruptive innovation, so rely on your payments provider who has an ear to the ground on these developments."
- Understand the shifts in business models even if they are small. If momentum builds in the payments ecosystem but has little impact on the payment business model, pay attention. "Disruptive innovation tends to come from the lower end of the market, and entrenched players often ignore developments until it is too late."