Choose Your Mobile Payment Platform Wisely

Betamax or VHS: Which will be the new normal in mobile payments? And can you afford to choose wrong?


When credit union executives hear about mobile payments, there are usually two thoughts that go through his or her head: “Is this a business I can get involved in?”and “If I don’t get involved, will it put my credit union out of business?” The answer to both of these is yes, but not as soon as one might fear.

Hypothetically, even if your credit union was in the position to choose a mobile payments platform tomorrow, what platform would be the best investment for your credit union? You better chose wisely. Most people likely remember betamax vs VHS, popularly referred to as the “videotape format war.” If you were forced to pick a winner in the 1970s, you at least had a 50% chance of getting it right. Today? Not so much.

There are so many mobile options today, your chances of getting it right are much slimmer. Just on my phone alone, I have Paypal, Cardstar, Starbucks, Passbook, LevelUp, IngBump, Belly and TabbedOut. I doubt more than half of these are actually going to be around in three years, but I downloaded them anyway because it didn’t cost me anything. I don’t think the same will ring true for your credit union.

Even though it’s much more likely that large-scale adoption of mobile payments is years away rather than months, your fear of the immanency of mobile payments might be strong for a pretty good reason. If you are an active news reader, the chances are very good that you’ll come across at least one article today talking about mobile payments, like this article. The Google Trends chart below shows that interest in mobile payments has been steadily increasing in recent years, peaking in August 2012.


Many of these articles discuss how disruptive mobile payments will be, and that “the time to implement mobile payments is now.” After awhile, you start to believe you’re a fool if you don’t have something in place at your credit union. But just because a topic is getting a lot of press doesn’t mean you have to believe it all. A Gallup Poll study conducted last year illustrates this point. It showed that most Americans perceived crime worsening in the U.S., whereas the data showed that in reality, crime had sharply decreased. The report concluded that the “unwarranted pessimism may stem from the imperfect indications of crime that Americans receive from the news and other sources.” 

So, going back to the original questions, yes, your credit union will likely have to adapt to mobile payments. And, yes, if you don’t adapt at some point mobile could put you out of business. However, the increased news and attention about mobile payments is at a fever pitch. So you might perceive its widespread adoption as more imminent than it really is. But you might be better off in the long-run to wait just a bit to see which player will become king.


Oct. 15, 2012

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  • In many cases, patience is a virtue! Nice thoughtful piece on the mobile banking craze, Michael. Glad our blogs continue scrutinize hot topics from all angles. -Rebecca McClay