Mobile wallets are as much a threat as an opportunity to the credit union community. In an effort to fight back, One Nevada Credit Union is working with several experts on
"[Existing mobile wallets] may look harmless, you load your One Nevada card information and you have a convenient way to access payments. But the problem with that is more long term," said Paul Parrish, One Nevada's chief financial officer, during a conference call on Monday. "Our members are going to be pecked away at with offers coming from our competitors."
All they need now is the right technology and CU Wallet wants to provide it.
The new system is being developed by Paul Fiore, who started internet banking company Digital Insight; Kirk Drake, founder of Ongoing Operations, the disaster recovery CUSO; and payments industry consultant Richard Crone. Because it will owned by credit unions as a CUSO, the founders say it will provide the CU community with a differentiated mobile payments infrastructure.
Their goal is to maintain control of member data — something CUs could lose if a third party's wallet owns the customer relationship. "We believe credit unions have the critical mass to drive a successful wallet," Fiore said.
Parrish said: "If you look at the currently available wallets, we don't think they are ready or operating in our best interest. All of them don't allow us to control our data's destiny. If we had a chance to offer members a credit union-centric wallet that would be as good or better than what is out there and be able to control the destiny of our data, to me that is a no-brainer."
In addition to One Nevada CU, 14 other credit unions have signed on to offer CU Wallet: Quorum CU, Purchase, N.Y.; Affinity FCU, Basking Ridge, N.J.; Workers' CU, Fitchburg, Mass.; Arizona State CU, Phoenix; University FCU, Austin; Kinecta FCU, Manhattan Beach, Calif.; Washington State ECU, Olympia, Wash.; Northwest FCU, Herndon, Va.; CommunityAmerica CU, Lenexa, Kan.; DFCU Financial, Dearborn, Mich.; City & County CU, St. Paul, Minn.; TwinStar FCU, Olympia; and Digital FCU, Marlborough, Mass.
The founders are looking for a mobile technology company to power the wallet on a white label basis, according to Fiore.
"Our mission is not to invest hundreds of millions of dollars in developing new technology," he said, adding CU Wallet is looking to partner with a company that has experience with credit unions and can offer integrated mobile banking and payments as part of the same user experience.
The wallet will also be used as part of "buy local" payment campaigns, as a venue to deliver and execute special offers and loyalty programs, and as a way to drive national merchant and consumer campaigns, Fiore said, adding the existing national market of credit unions and members provides a readymade market for a mobile payments system.
