Today, consumers have a need for speed and convenience. And too often, traditional payment methods are seen as lagging behind.
To transform the credit union and better meet the growing needs of its member base, consider these three emerging payment trends: institution-branded person-to-person (P2P), electronic billing and presentment for the small- and medium-sized business (SMB) market, and expanded managed services across all electronic card payment types. Credit unions that take advantage of these options have the opportunity to increase revenue, build member stickiness, and drive loyalty.
The Growing Adoption Of P2P
In the past, if someone owed a friend or landlord money, that person wrote a check. In today’s increasingly paperless world, that’s just not convenient enough. Enter P2P.
On the most basic level, P2P payments enable members to make payments to individuals from their credit union accounts electronically, using only the recipient’s mobile phone number or email address.
Here is the scenario: A member owes another person money. They engage a mobile app or tab on their credit union’s Internet banking site and initiate an ACH transaction from their financial institution to the recipient’s. The sender doesn’t need any of the other person’s confidential account numbers or any other private information.
The recipient then receives a text or email with a confirmation number, authenticates the transaction through a confirmation, then designates their institution’s routing number and the account number where the funds should go. Two days later, the cash is there.
Although P2P transactions aren’t new, the way people use this service is fundamentally changing. Once primarily used to buy items on eBay or to pay back a friend, this payment option is now used by everyone from apartment dwellers paying monthly rent to soccer moms collecting funds for uniforms.
By offering this type of service now, credit unions can provide non-Internet-banking members (as well as those who bank online) with a more efficient, institution-branded way of moving money electronically.
Electronic Billing And Presentment
Small- and mid-sized business owners are constantly looking for untapped efficiencies. Credit unions that actively serve the SMB market can increase their stickiness by providing an electronic presentment and payment solution to these individuals.
Each month, electronic versions of the SMB’s invoices are loaded online. Business owners are then notified and they can log on, view their bills, and pay electronically.
Many SMBs are willing to incent their clients to use electronic billing because, in the end, they reap many financial and operational benefits. Not only do the SMBs save postage and printing costs, but they also save bookkeeping time. All of the payments are electronically received in a posting file which the business owners can then load to their accounts receivable system. This benefit, along with the inherent cost savings and cash flow acceleration makes the option particularly attractive.
Expanded Services For Electronic Payment Cards
In the past, most credit unions engaged a variety of providers to manage different types of electronic payment and credit cards, merchant services, and card swipe devices.
Today, credit unions are looking for a single partner to provide and manage a full range of services ─ including customized rewards programs and turnkey fraud protection/monitoring ─ for the entire electronic card payment suite, including credit, debit, ATM, and prepaid.
This approach brings operational efficiency to the institution and provides one cohesive method for managing and monitoring the institution’s complete electronic payment card portfolio. It can also be outsourced so credit union staff can focus their attention on great member service.
All of these payment products give credit unions new ways to stay competitive, become more efficient, and better engage their members.
Harland Financial Solutions serves as a strategic technology partner to more than 6,000 financial institutions of all sizes, including commercial banks, thrifts, credit unions and mortgage companies. For more information, visit www.harlandfinancialsolutions.com.