SEATTLE-BECU members here will be able to wave their phone to pay retailers next year, as their credit union joins a number of CUs working to roll out contactless mobile payments.
"We'll offer contactless mobile payments in the next 12-18 months, if not sooner in pilot," said Howie Wu, VP-virtual banking at the $9.2-billion CU. The platform most likely will be deployed within BECU mobile banking and will transmit payments via near-field communication (NFC), a short-range wireless technology.
WV United FCU of Charleston, W.V., wants to be one of the first to offer contactless mobile payments, said Linda Bodie, self-proclaimed "head honcho" at the $25-million WV United FCU. In 2009, WV United became the first CU to offer mobile deposit capture to members.
"Mobile contactless payments are coming, and you better be ready," Bodie said. "Early adopters will have the advantage in generating and keeping revenue from their credit card users. Members will be able to use one device and one hub for all their financial needs."
Dwolla, a social payments vendor, currently has the most promising contactless mobile payments solution, she added.
NFC technology shows "great promise," said David Weinstein, director, marketing, at $365-million Sunmark FCU in Latham, N.Y. "NFC payments will prove to be more secure, convenient and widely used than conventional cards. Banks, handset manufacturers and payment systems are already in trials and testing. We'll make sure Sunmark is at the forefront of mobile POS."
But "significant NFC handset penetration is 18 months away for consumers," he warned. "And there's a lot of consumer awareness on education and security that needs to happen."
"Merchant acceptance will be the biggest challenge for BECU," Wu continued. "It's a matter of waiting for the payments industry to make NFC terminals more readily available with merchants. But BECU has the solutions and partners ready for implementation from a technology standpoint."
BECU's mobile wallet would combine NFC payment capability with location-based marketing using the device's GPS, he added. "For example, as members move about the city, we could have GPS enabled within the wallet to deliver special promos or discounts from merchants that partner with us."
Membership Is Ripe
The largely urban membership at InTouch CU of Plano, Texas, is ripe for contactless mobile payments, according to Tim McCoy, VP-marketing and e-commerce at the $850-million CU.
"In large, metropolitan areas, members and retailers are more likely to desire the technology," McCoy explained. "Once a mainstream base of retailers adopts this payment technology, we feel contactless payments will grow exponentially. We'll actively participate in the development of the Fiserv Mobile Money platform for POS."
Verity CU is looking to mFoundry mPayments for NFC that's integrated with mobile banking and that makes payments "convenient" for members, said Jon Wu, senior engineer at the $380-million CU based in Seattle. mFoundry provides Verity's mobile banking platform.
Star One of Sunnyvale, Calif., is waiting to offer contactless mobile payments until a vendor can provide a "well established and large scale, adoptable model," said Fred Shuherk, manager, Web services, at the $5.6-billion CU.
Tyfone's SideTap memory card is "nice," Shuherk said. The card can be inserted into 70% of existing mobile phones to turn them into contactless NFC devices. Tyfone of Portland, Ore., offers mobile financial transaction solutions.
TDECU members currently aren't interested in contactless mobile payments, said Brad Clutter, online banking product manager at the $1.6-billion CU in Lake Jackson, Texas.
"Feedback from our members does not indicate a need. I think the cost-benefit analysis isn't favorable for this technology right now," Clutter said.