DES MOINES, Iowa-The plain vanilla credit or debit card with no extras will likely get shoved to the bottom of the digital wallet.
As merchant terminals connected to the Internet open up point-of-sale to alternative payment sources, CUs must develop ways to make their cards stand out, card processors and analysts insist, and the digital wallet will be vital to this effort. "All these alternative payment mechanisms are trying to get at the same issue, create more value for the consumer-and merchant too," said Jeff Russell of The Members Group. "What the credit union needs to do is determine how its credit or debit card transaction can create more value for the consumer and merchant."
That may mean partnering with merchants to create "Groupon-like offers" that give members discounts on dining, for example, when they use the credit union's card. To create greater appeal with merchants, Russell CUs and/or their vendors must be able to providing data that supports the CU's card is driving store revenue.
The card also has to be more more closely connected with members' lifestyles, explained Dom Moreaof First Data Advanced Solutions and Innovations in Atlanta. Card usage analytics should help the CU tie merchant discounts to members based on each person's buying habits, he said. "In a very online and connected payments world, you want members thinking that by using the credit union's card they are never missing a savings."
CUs should carefully choose the mobile delivery platform members will interact with daily, said Rick Oglesby of Aite Group. "Pay close attention to the various digital wallets and how those are being adopted-what sort of demand each one is creating within the credit union's member base, and then figure out the CU's wallet strategy. Does the credit union want to own its own wallet or integrate with a third-party wallet?"
Denise Stevens of PSCU in St. Petersburg, Fla., said CUs should choose a mobile wallet provider it can grow with, so as payment options are added, members don't have to use different applications. "Pick the partner that will allow you to seamlessly drive the content and applications that are most important to your members," she said.
Having a common mobile banking experience is critical to member acceptance, said Tom Berdan, VP of product management at Harland Financial Solutions, Lake Mary, Fla. "You want to streamline the user experience so it's basically the same no matter what members do via mobile," he said. "In order to get mass adoption you have to make this very easy for the general membership."
