It is moving at lightning speed, driven by consumer demand. Oftentimes financial institutions are slower to adapt, using cloaked terms like "safety" or "security" as a reason for concern. They are nothing more than excuses, really. The recent Equifax breach has shown us that if anything, security must always be paramount. Assuming you are diligent in this regard, there is no reason to be slow concerning mobile banking. It will not work.
Consumers demand banking experiences that can keep pace with their lifestyles. That's why there are so many different payment gateways. Consider the following list of giants. Entities like Apple Pay, Google Wallet, Facebook Messenger, PayPal and Venmo all exist to enhance peer-to-peer payment processing. They try to make the payment experience easy and seamless. The fewer steps required for a consumer to perform in order to send money, the better. The less that is required of them to interface with the application, the better. It has become the new marketplace standard.
These are points to consider when fine-tuning your mobile banking application. Your members want three things … speed, ease and security. It's why bill payer services were so popular for a while. And while you might not think things have changed much, they have. New payment apps have substantially decreased the fees associated with credit union bill pay services. In many instances it costs nothing for a member to make a payment. Plus, they are less bulky and easier to use. It's a true win-win for them.
How Does Your Credit Union Keep Up?
Thankfully, there are solutions to help you keep pace. One option is that members can access their funds. It's the latest evolution in the world of P2P processing and is making a difference. Remember, the first year that P2P payments became available, there was a 670% increase in those transactions. Those are numbers you simply cannot ignore if you want your mobile baking platform to have value and be used by your members. Yet you may not have to reinvent the wheel, either. Consider what is available now, and what the payment gateway differences are for banks and credit unions. Here is why users love new bill pay options.
Credit unions may take a couple of days for a payment to process, while new apps take only a matter of minutes. It's the answer consumers have been looking for, and the interface is easy to use. All credit union members have to do is link their credit union account or debit card to the app. While new apps look to make payments a social experience, new gateway developers are creating options for those members looking for the security of making a payment backed by the credit union. Your credit union also needs to consider that the content of the app is collecting the proper data. For example, making sure that the membership application is compliant with state and federal rules is part of the due diligence process your credit union would need to go through before choosing a payment gateway.
What About App Security?
This new form of payment processing not going away, either. It is not an industry fad. Peer-to-peer payment processing is here to stay. The only questions now are those of speed and security. Processing will obviously continue to get faster with time and updates, and security will continue to improve as well. Many developers are using real-time monitoring services that run quietly in the background, to prevent would-be hackers and cyber thieves from stealing member information.
You can already see the paradigm shift. This is how business will be conducted in the future. Credit unions will begin to steer away from creating their own apps for payment processing, and instead will partner with industry players to get the job done as more retailers and creditors begin to acknowledge their use in the marketplace.
Could this be the death for bill pay services? It's too early to tell. There are many seniors and boomers who still love the convenience of having their bills automatically drafted from their accounts each month. The fees are negligible to them and the convenience is one of not having to think about it. Millennials, though, are a different breed. They are used to moving at lightning speed, so P2P processing is a good fit. It is an expectation, so P2P apps will only increase in popularity. It is definitely something to consider when developing your mobile app. Current apps are fast proving the old saying, "If you can't beat them, join them." How you address that phrase will make all the difference in your mobile banking experience at your credit union.
Richard Gallagher is CEO at Oak Tree Business Systems, Inc. He can be contacted at 800-537-9598 or [email protected].
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