I am not a big fan of Las Vegas (for the life of her, my editor cannot figure out why) but it was an appropriate venue forBAI’s Payments Connect 2014. Trying to predict with any certainty what the future holds for the payments space is likegambling against long odds. According to one expert who spoke during the two-day conference, the digital wallet and mobile payment space has at least 280 companies leveraging or developing at least 20 different technology models. In a world this crowded, and with the limited resources of a member-owned institution, how can a credit union possibly pick a winner? Even in roulette, a player has 38-to-1 odds of choosing the correct slot.
Fortunately, like a roulette wheel, this environment is shaping up to offer some safer bets. Many of the most interesting initiatives discussed at Payments Connect are designed to be white-label products that deliver core capability either as a component of a larger system or in an institution-branded or co-branded application. What’s more, new plug-and-play products allow individual credit unions to choose the best-of-breed solutions that most closely align with their mission and membership.
There are no guarantees this approach will win out over the proprietary, whole-solution systems that receive the most press attention, but they have three things going for them. First, they are applying the lessons of the most successful first-stage disruptors by focusing on doing one thing really well. Second, they are betting that shared, networked solutions will win out over closed loop alternatives. This bet is based in historical precedence; even in the case of the classic counterexample, Apple, its Mac and the iPhone have significantly smaller market shares than its competitors. Third, they are listening to their own customers — banks, credit unions, and vendors — and trying meet their needs with a simple, safe, sound, and affordable experience.
Credit unions have to take meaningful steps to invest in their future. They must take risks. But if you stay focused on your greatest competitive advantage — the member experience — you can make investments and place bets that pay off.
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