Credit unions talk a lot about gaining share of wallet. So when Google recently announced its new mobile payment system, branded Google Wallet, this got me thinking about what happens when our member's wallets go virtual? For some, the idea of using your cell phone to check out at the grocery store seems futuristic and downright dangerous. But let me assure you that as a 30 something, and proud owner of a Google Wallet enabled phone, I simply can't wait.
For years, we've heard that mobile payments would be coming down the line. Now that this technology exists and is getting some pretty significant backing, the question becomes why should credit unions jump in now rather than later? Here are three reasons why credit unions need to be closely watching this budding technology.
With interchange down, it's time to think long term.
While investing in services like Google Wallet won't recoup the loss of interchange income, credit unions should be looking for ways to maximize debit card usage. Strategically, mobile payments are the future and soon-to-be present. As more consumers adopt Google Wallet and its competitors, the pressure will be ever higher on credit unions to jump into this fast changing market. Giving members the ability to make mobile payments through their smartphones is the next evolution in member service.
Convenience, convenience, and convenience.
I can't stress enough that the key to reaching younger members is through convenience. Payment systems, like Google Wallet, are shaping up to be the epitome of ease when it comes to financial services. Undoubtedly, those credit unions who invest early will make waves with the Gen Y demographic. This younger generation is willing to try anything technologically and values simplicity and ease of use above all else. Using your cell phone to pay for a coffee at Starbucks in less than a second is about as easy as it gets.
The complete mobile strategy.
Giving members the ability to make mobile payments through their smartphones makes perfect sense within a broader mobile banking strategy. The opportunities to gain a larger share of wallet abound when credit unions provide members with a variety of mobile options. Merging mobile payments, to app development, as well as targeted mobile marketing, allows credit unions to close this strategic loop with their members.
With mobile payments systems from Google and expected offerings from Apple, PayPal, and others, credit unions will need to think strategically about how they can best serve their members. Not all current members will adopt these technologies, but I'm willing to bet a good share of the prized younger demographic will.
The Crash Network is a grassroots organization of more than 160 young credit union professionals. Its activities include meetings, mentorships online collaboration and development projects. Opinions expressed are the personal views of the author.
Ken Gardner is an account management professional at Amplify Credit Union, Austin, Texas.
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