Lower interchange fees are a big incentive in a pilot program the $414 million, Saginaw, Mich.-based Team One Credit Union, launched with Newark, Calif.-based MShift, Inc.'s AnywhereMobile mobile payment network.
According to Team One and MShift, AnywhereMobile's interchange fees are significantly lower than those tied to the plastic card networks on which Apple Pay and Google Wallet depend, and AnyWhereMobile enables merchants to provide Team One members with loyalty incentives and rewards for using the service. AnywhereMobile's approach to mobile payments allows Team One to continue earning good interchange income, and at the same time provides a mobile payment service that benefits the credit union's members and merchants in its community.
After they register for AnywhereMobile through the Team One mobile banking app, members can securely make purchases at participating merchants and send real-time, person-to-person (P2P) payments to anyone via their mobile phone number or email address. MShift's roadmap for AnyWhereMobile includes adding the ability to make online and in-app purchases as well as support for NFC and fingerprint recognition.
"We are excited to be the first to launch AnywhereMobile for both our individual and commercial members," Gerald Hutto, president/CEO of Team One Credit Union, stated. "We see AnywhereMobile as an excellent way to offer convenient, exciting and cutting edge service to our members as well as a way to grow individual and commercial memberships and a means of maintaining our interchange income."
"This is a historic moment for Team One and MShift as we process the first AnywhereMobile transactions for a neighborhood merchant," Scott Moeller, CEO/founder of MShift, said. "These transactions represent a revolutionary transition into the age of digital payments in which there are no static credit or debit card numbers or their associated fraud risks. With AnywhereMobile, mobile payments are the least expensive method to complete a transaction, compared to Apple Pay and Google Wallet."
In addition to offering AnywhereMobile to its members and local merchants, Team One will also serve as the clearing bank for the settlement between credit unions and merchants for AnywhereMobile transactions.
When Apple Pay launched in October of 2014, Apple announced that the Apple Pay "wallet" would collect a small toll, 15 basis points (0.15%, or 15 cents, on a $100 transaction), from the issuer each time their card is used at a merchant.
Piper Jaffray's low-end estimate forecasts that this Apple fee will bring in $118 million in revenue in 2015 and increase to $310 million in 2016. On the high-end, Nomura's equity analysts estimated it could account for $1.6 billion in revenue by 2017.
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Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
