"As the mobile wallets have been introduced to market, credit unions are more comfortable with the idea of mobile payments. Once they decided to participate in one then it was a much easier decision to choose to opt into others," McGinness said.

However, more choices create additional, critical decisions for credit unions.

"The key delivery challenges from a product standpoint are time and resources. Each wallet requires the credit union to get familiar with it to best support members in using the applications," Amanda Smith, manager of emerging products and integration for the Rancho Cucamonga, Calif.-based CUSO CO-OP Financial Services, said. "While the requirements for enrollments into these new wallets are almost identical, they all take time to implement and test."

BI Intelligence estimated U.S. in-store mobile payment volume will reach $75 billion this year and anticipated a volume of $503 billion by 2020. It also noticed while the mobile wallet ecosystem is maturing, in-store mobile payments are not yet taking off because of consumer apathy, coupled with delays in total implementation of the required infrastructure.

Apple Pay adoption, for example, is low, according to research from the Dallas-based Parks Associates. Only 10% of iPhone owners have used Apple Pay, and, among those who have not used it, 63% said it is because their preferred merchants do not support it as a payment option.

"Only 19% of U.S. smartphone owners and 15% of smartwatch owners have used a mobile payment app," the firm said.

Although the market has slowed down a bit, mobile payments adoption is still really about enabling choices for members. When mobile payments first emerged, credit unions had to shift their priorities quickly, McGinness explained. And they're still having to consider priorities when it comes to mobile payments.

"One of the things they have to stop and consider is what is going on with their current plans and how are they going to adjust to enabling that new payer to their credit union members," McGinness said.

From a product perspective, there are other hurdles. The initial provisioning of a card into a wallet for the newer wallets (not Apple Pay) has been slightly labor-intensive for credit unions, Smith explained.

"These card provisioning attempts today are all routed to the credit union for authentication, where with Apple Pay, the iTunes history allowed for authentication without the credit union's intervention," she said.

The move to supporting multiple payments products that are not on CO-OP's roadmap brings resource planning challenges, Smith said. However, CO-OP has been flexible enough to be able to address onboarding and support new products and features quickly.

"Our product and service decisions are based on what is most meaningful to our credit unions," Smith said.

McGinness added, "We are going through waves of implementations of credit unions. So there are credit unions that are still in the onboarding process."

From a security standpoint, the good news is tokenization is at the core of these mobile wallet transactions. So, they enable credit unions to offer a safe payment method for members. Because all the wallets offer tokenization on in-store transactions, any security-related challenges are minimized, Smith noted. With Masterpass by Mastercard, a new tokenized version is functional both during the checkout process and for online purchases. The previous version of Masterpass was for e-commerce purchases only.

McGinness also noted that with mobile payments solutions arriving concurrently with EMV, credit unions have a good opportunity to promote mobile payments security to members.

For credit unions, embracing a third-party branded wallet also means losing some control of the payment experience.

"It is the same thing as using a card online – the credit union does not control that experience, but it is enabling a safe payment mechanism for consumers," McGinness said. "Ensuring members are educated on how their card can be used and which wallets they participate in is a challenge for credit unions."

The other tradeoff involves big data.

"With the third-party wallets, we don't have access to as rich of a data set as we do with traditional card payments," McGinness explained.

However, PSCU is working on that.

"We've developed a well-organized onboarding program for the wallets, so we are confident that we going to be able to adjust and adapt in the future as new wallets are introduced to the market," she said.

Recently, PSCU announced it is expanding its digital wallet offerings to include Masterpass by MasterCard and Microsoft Wallet. The CUSO plans to make the wallets available by September.

"PSCU wants to make sure that our member credit unions are able to provide their members with accessibility to their cards where their members want to use it," McGinness said.

She emphasized it is important that the industry remain committed to evaluating and monitoring the environment, and look for new digital payment opportunities that enable card usage and meet consumer demands.

"We are not at the tipping point of mobile payments taking over by far," she said. "We are still seeing limited growth there. Credit unions really have the opportunity to educate their members to ensure they are aware of where they can use their card and through which wallet to help push the mobile payments effort."