As the digital money movement evolves across financial industries, we are forced to ask ourselves if one of the most mature and pervasive digital payment methodologies is still relevant today.
Online bill pay has been around since the early 1980s, when CheckFree was formed in 1981. During that time, Ronald Reagan was the 40th president of the United States, “Raiders of the Lost Ark” was No. 1 at the box office, and the Oldsmobile Cutlass Supreme was the top-selling car. The iPhone would not make its debut until 26 years later, and the internet was not fully commercialized in the United States until 1995, when NSFNET was decommissioned, removing the last restrictions on the use of the internet to carry commercial traffic.
The landscape and the Internet of Things have certainly changed over the past 36 years. In the financial marketplace, with Venmo, Zelle, digital wallets, and the rush to make everything mobile and integrated, traditional online bill pay has some serious and well-funded competition.
However, among the most frequent types of bills paid by consumers (14.7 billion) in 2016, 56% were conducted online via biller direct, a bank or credit union, or via a third-party website. These 8.2 billion online payments represent $2.14 trillion.
So, when talking about trillions of dollars, online bill pay continues to be very relevant. The question then becomes, “How do I keep my credit union relevant in this space?”
The following are five ways that credit unions can drive members to better use their bill pay services.
No. 1: Education About Security
Cybersecurity is prevalent in the public mind more than ever before, because of emerging threats. Do members really benefit by going directly to multiple biller sites to pay their bills? It certainly increases the chances of their data sitting in a less-than-secure location. From Target to Home Depot, and other public breaches, credit unions can and should make the case to their members that, by using their trusted credit union, their data will be less exposed and more secure.
Tip: Use your credit union’s website, newsletters, and social media channels to make this a part of your message to members.
No. 2: Convenience And Engagement
Consumers believe in the benefit of convenience, and this remains true for products such as bill pay. Consumers do not want to have to remember multiple passwords for various websites. Therefore, having to log into their credit union’s website as their preferred trusted gatekeeper is a more desirable path for members. It is vital to educate members that convenience and security is of the upmost importance to your credit union, and that you always have their best interests in mind. Members who use bill pay typically use more services offered by the credit union, such as debit cards, first mortgages, and most of all, credit cards. Member engagement is critical in today’s ultra-competitive environment.
Tip: Do not ignore your bill pay solutions; and be sure to cross-sell this sticky product with credit and debit offerings.
No. 3: Mobile And The Growth Of API
Today’s members are all about the mobile channel, and this is true across all age demographics. Application Programming Interfaces (APIs) are a hot trend in the financial services marketplace. In general terms, APIs are clearly defined methods of communication among various software components. Specifically, this allows your mobile provider (or your IT staff if you do your own development) to access the bill pay service provider’s “engine” through the interface of the mobile app. This gives the user a single interface with traditional Internet banking features and the ability to pay bills, ad payees, and more. Users do not need to log into bill pay separately. While single sign-on has been around for years, APIs keep the user within the mobile app with a consistent look and feel, which increases convenience.
Tip: It is key to choose vendors who are open to working with third parties, and coordinating a conversation between them will ensure ease of use for your members.
No. 4: Control Of The Message
If you do not think your members are getting mortgage or credit card offers at biller direct sites, then you are not paying attention. By educating staff to talk with members about the security and convenience of routing payments through the credit union, you will better control the conversation. Credit unions are all about the members and member service, so doing business with a credit union is always the right choice.
Tip: Messaging is a key part of your social media strategy, so be sure to educate staff on the best ways to deliver your credit union’s message across all platforms.
No. 5: It Is All About The App
Bill pay and mobile need to be one and the same. Branch traffic is down, and mobile usage is up. While personal relationships will always be a central benefit of credit unions, it is important to understand that those relationships have changed. For good or bad, people interact differently today than they did in the past. Cell phones, tablets, and other technological advances will continue to be major factors in members’ lives.
Tip: Embrace the change! Your members certainly have, and so have the big banks and direct billers. Ask your vendors and partners for advice on what they see working with your peers. Most partners are happy to have these conversations and have great insight to share over a broad spectrum of the market.
Even with all the changes in technology, bill pay continues to be the workhorse of the financial landscape. In order to move ahead of the competition and evolve, credit unions must capture members’ attention and get their payment transactions focused on their credit union services.
Steven Mathias is Membership Development Executive at PSCU. He is responsible for identifying net new client opportunities, building relationships to understand clients’ needs and proposing the appropriate PSCU solutions. Steve is well versed in working with C-level contacts and supporting staff, and he has extensive experience in credit, debit, prepaid, EMV, eBanking, bill pay, and payments strategies.