Open Payment Technology Spreads to Credit Unions

The recent explosion of mobile commerce and payments would not have been possible without open and sharable technology, and the credit union service organization CO-OP Financial Services aims to duplicate that success with its own technology.

CO-OP, which offers shared technology and other services to credit unions, has built a suite of application programming interfaces (APIs) to enable credit unions to integrate its mobile and Web technology directly into their own channels.

"We kind of jokingly refer to it as a 'Chinese restaurant menu,'" said Lois Hansen, vice president of product development for CO-OP. "You can choose one function or another function, so it's a series of options and functions."

Much of the technology is geared toward payments and card management apps, though the APIs can aid in myriad mobile financial services such as ATM locators, remote deposit capture and shared branching, Hansen said.

The CO-OP API Suite is headlined by CardNav, a product that rolled out in 2014 as a standalone mobile app for consumer card management. CardNav will be included as one of the new APIs, allowing the card controls be accessible directly from individual credit unions' mobile apps.

The suite also includes customizable versions of the RealPay person-to-person payments system, CO-OP Bill Pay and other more general financial services apps.

Companies such as Stripe and WePay have attracted business through their APIs and software development kits (SDKs), which allow mostly smaller merchants to build their own payment-enabled e-commerce sites and apps.

Other companies use APIs for other financial services needs. Feedzai, for example, offers APIs to build security and fraud prevention technology, such using search and filtering tools to improve the information that's available on transaction parties. And e-commerce company BlueSnap recently added APIs to help developers build transfer and coupon apps. Another company, Dwolla, offers an API that companies such as GoDaddy have used for invoicing.

CO-OP also plans to enter a partnership to build e-commerce APIs, though that's a longer-term project, and it plans to create what Hansen calls a "library card" structure where users can view and pick APIs for a particular use.

"We're getting a little more open than we were in the past," Hansen said.

While CO-OP is using APIs to expand its reach—credit unions do not have to be a member of the CUSO's network to access the APIs—it is also relying on an existing relationship with credit unions that have used other shared services for the EMV migration, payments processing and a "shop local" merchant rewards program.

Other credit union networks are also pursuing mobile payments and m-commerce, including CU Wallet, which is partnering with technology and marketing companies to give credit unions an alternative to larger mobile wallets from Apple, Samsung and Google.  

Integrating new features is a challenge for all companies, but will be especially challenging to those that have limited resources and a mobile platform that was not designed with integration in mind, said Tim Sloane, vice president of payments innovation for Mercator Advisory Group.

Many credit unions fit this description, he said.

"Making mobile APIs available is crucial to lowering the cost of implementation," Sloane said. "How much the API will simplify delivering new mobile features depends on the architecture of the mobile platform."