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By Elan Financial Services
As mobile technology continues to grow and change, so does consumer appetite for embracing it. According to the Pew Research Center, 67% of Americans own a smartphone and 19% use their smartphones to stay digitally connected to the world. People use their smartphones regularly to check the news, post social media updates, connect with friends and family, email colleagues or make mobile payments. As the most technologically-connected generation of modern time, it’s no surprise that millennials are leading the mobile payment revolution, with 75% of them using their mobile phones for mobile banking. The U.S. Census Bureau estimates this generation makes up more than 75 million people, which means there are about 56 million mobile phones using mobile banking services on a regular basis.
In addition, eMarketer expects that by 2020, 90% of smartphone users will have made a mobile payment, and the total value of mobile payment transactions in the United States (average user spent $376 in 2015) will grow 210% this year.
The growth in mobile phone use is fueling the growth in mobile payments, which in turn is fueling the growth of mobile payment providers and services. To stay relevant to cardmembers, credit unions need to be knowledgeable about the different types of payment methods available to their members in order to keep up with banking trends and membership needs. This paper is a guide for credit unions to embrace the world of mobile payments.
Mobile payments are payment services that operate under the normal financial regulations but are performed via a portable electronic device such as a tablet or smartphone. The table below explains the five main types of mobile payments along with potential pros and cons for each method.
Consumer demand for simpler, mobile payments has created a marketplace with numerous different solutions. With the many mobile digital solutions in the market today, they all are struggling to gain traction on the critical mass, due to multiple issues. Solution providers have been challenged with the transition from one space into another such as peer-to-peer to mass commerce acceptance. Many consumers lack the bandwidth to utilize multiple mobile payment solutions at the same time, choosing to revert back to established patterns. Finally an increasing number of retailers are choosing to offer a mobile payment solution, creating a more fractured landscape.
Overall, cardmembers are engaged around mobile payment solutions though the final landing spot remains uncertain. Mobile payments technology is still early in the adoption stageand there will come a time when the gap between awareness and adoption merge. In the interim, credit unions and other financial institutions should remain flexible in providing as many solutions to their cardmembers as reasonably possible, while watching the industry for future solutions. Credit unions need to make multiple bets in this environment.
Click here to download a copy of the white paper, Embracing the Rewards and Risks of Mobile Payments.
Elan is the leading credit card provider in the industry that offers partners a suite of credit card products that competes with the national issuers, technology solutions that cater to audiences across the credit spectrum, and free access to a marketing engine to help generate new accounts. By partnering with Elan, credit unions can offer cardmembers valuable mobile payment options such as Apple Pay, Android Pay, Samsung Pay, and Microsoft Wallet. For over 45 years, Elan has delivered exceptional credit card products and service to more than 300 credit unions. For more information, call 1-800-223-7009 or visit https://www.cupartnership.com.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
If you are interested in contributing an article on CreditUnions.com, please contact our Callahan Media team at firstname.lastname@example.org or 1-800-446-7453.
September 12, 2016
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