The CUNA E-Scan Report for 2014-2015 says that mobile payments, which totaled about $16 billion in 2010, grew to $214 billion in 2014. The same report found that 60% of consumers make digital payments monthly, 30% make them by mobile phone and 22% by tablet.

A 2014 report from Mercator Advisory Group found that 43% of smartphone users have used mobile payments, up 39% from 2013 and up 105% from 2012.

Mercator also found that 88% of consumers sent money to other consumers in the past 12 months. According to CUNA E-Scan, 31% of those consumers used an online method. And, Timetric found that more than half of global business professionals use mobile phones for payment transactions.

A Carlisle & Gallagher Consulting Group survey shows that 52% of mobile banking customers use mobile banking more than they did two years ago, and 55% said they use mobile banking two to three times a week.

Mobile is the top channel for member engagement with more than one million mobile transactions per day, according to CUNA E-Scan. The report finds that among credit unions, 58% offer mobile banking, 26% plan to within two years and 30% say more than half of checking account holders have online banking.

The Need for Speed, Convenience and Security

So, now, the key question for credit unions is: What do members want in their mobile banking experience? CO-OP finds that when asked what is most important to credit union members, 44% said "convenience," followed by 22% who said "speed" and 19% who said "security." 

They want convenience. And, they are more than ready to move to mobile to get it. When asked if they would replace their plastic cards with a mobile wallet, 43% percent said yes and 41% would do a mobile money transfer, according to Mercator. Convenience is the key. A critical tipping point in this race for mobile adoption will be the introduction of a mobile wallet that is truly usable at a wide variety of merchants. So far, we haven't seen such a vehicle, but Apple Pay is the front runner. 

They want speed. I mentioned "the age of impatience." CO-OP commissioned a study by Trend Watching in connection with our THINK 15 Conference in May. The research firm told us, "Consumers with expectations cultivated in the borderless online space expect borderless services." What that really means is: Consumers want it now. We can all see why Amazon has a conceptual drone-based delivery system currently in development. Mobile payments today have to be in real time.

They want security. Consumers are still nervous about the use of digital wallets, but it's getting better. The Federal Reserve's "Consumers and Mobile Financial Services 2015" reports that while 62% of consumers surveyed said they were concerned about security, that's down from 69% in the 2014 study. Staying one step ahead of fraudsters is paramount for the development of mobile payments, and the age old advance to medical students – "first, do no harm" – applies here, too.

Apple Pay's base payment technology – tokenization – and EMV are among the answers the payments industry is calling on to fight fraud. And, mobile card controls and alerts apps are putting the power to fight fraud right in the hands of members, enabling them to set controls according to a wide variety of parameters on the use of their cards.

Time for Going Mobile

As noted earlier, 58% of credit unions offer mobile banking. Another way of looking at it is research by CO-OP that shows many credit unions still in the formative stages of a mobile strategy:

• 31% say theirs is ready to take off; 
• 28% say it's in early development;
• 22% are in the planning stages; and
• 19% describe theirs as best-in-class.

So, there's currently a little bit of a mismatch between the incentive to adopt mobile and what people are actually doing at their credit unions. If we take a step back, though, the data and market trends do become clear, as does a course of action. As increased usage and advances in anti-fraud protections increase marketplace confidence in new forms of payments, credit unions need to move forward to satisfy an increasingly mobile and impatient consumer.

Caroline Willard is executive vice president, markets and strategy, for CO-OP Financial Services. She can be reached at 800-782-9042, ext. 5934 or [email protected].