It's no doubt that money movement and payments are growing in the mobile channel. In fact, check deposit is used by 25% of active mobile banking end-users, and 10-12% of active users take pictures of bills to make payments every month.
Here are four strong examples of real people moving money and making payments inside mobile banking: Mobile check deposit – depositing a check via the camera; mobile photo bill pay – paying a bill via the camera; person-to-person (P2P) payments – paying friends using mobile banking; and card management – managing a debit card's activation, deactivation, limits, etc. in mobile banking.
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Along with the basic payment functions mentioned above, one of the most important examples is the use of mobile bank marketing programs, such as loyalty and rewards. These programs feature offers from local merchants, and drive traffic to businesses and increase debit card usage for credit unions. Many also provide money back or other rewards for leveraging the program. This ultimately builds stickiness within the app and results in stronger communities by rewarding captive audiences who visit local businesses. It is the perfect blend for local credit unions who want to show their greatest strength: Connection to their local community.
While the industry is focused on e-wallets, it's important for credit unions to not forget the established payment and money movement functions that are already available to members. E-wallets are not a reality today beyond Apple Pay, which does not require building anything for mobile banking. What is a reality is implementing innovative e-payment solutions that exist right now.
These mobile payment features can be surrounded by innovative new technologies that help secure the channel and payment, such as biometrics. How can biometrics better secure the mobile and desktop channel? Are the technologies viable? Can they work on enough devices to be relevant? The good news is that, yes, the technologies are viable for security efforts today.
Touch ID – using a fingerprint print reader to gain access to a smartphone – is a great example, albeit, it is only functional on a limited platform. Imagine using Touch ID and biometrics to further secure a remote check deposit transaction, allowing for greater management of the risk around depositing checks via the remote channel. Other biometric technologies, such as voice recognition, are also becoming cost-effective enough to be considered. The big win is for the end-user, who can experience a channel that is easier (and cooler) to use and yet also more secure, thus enabling a greater flow of payments overall.
It is an exciting time for mobile payments and payments in general. Mergers and acquisitions in the industry continue to drive innovation. Just recently, a well-established provider of e-wallets, Paydiant, was purchased by PayPal. This is a sign of two key manifestations: Consolidation and momentum are happening simultaneously to make e-wallets a reality, and there will be multiple wallets in the future. It does not seem that there will be a single wallet to rule over the rest, instead, there is a fractured market where credit unions can have a wallet directly embedded in their mobile banking application.
Mobile payments are happening every day. They are becoming one of the largest drivers in the development of the mobile banking channel. This new form of payments is a great way to engage end-users and train them to think of the credit union as the provider of innovative mobile payment solutions.
Robb Gaynor is chief product officer for Malauzai Software. He can be reached at 512-961-5699 or [email protected].
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