Mobile’s Missing Link

Credit unions have the potential to be more than bystanders in the developing mobile payments space.


Several cooperative financial institutions offer peer-to-peer payments options for mobile, but securing a definitive role in point-of-sale commerce is proving difficult. As Google and Isis spar over the high ground with Near Field Communication and naysayers like PayPal and Square present their own software-based alternatives, many credit unions are unsure about their next steps in mobile.

The only issue with a wait-and-see approach is that many mobile Point Of Service (POS) payment options propagated by third parties are shaping up without much emphasis on the specific roles or benefits for financial institutions.

In many cases, credit unions could remain the holder of member’s funds (and all the financial liability they bring), but mobile payment technology can offer so much more. A branded wallet app that combines POS and P2P payments with traditional mobile banking tasks would drive new relationships, provide enhanced data for marketing, and springboard consumer value propositions that the technology currently lacks. Financial institutions themselves are the best funnel for translating convoluted, multi-party efforts into a comfortable consumer experience.

“You have to get consumers to change their behavior and we think banks are in a great position to do that,” says James Anderson, senior vice president of mobile for MasterCard in a presentation to attendees at the 2012 Bank Innovation conference in San Francisco.  Since this market is not fully defined, credit unions, CUSOs, and their vendor partners can shape some aspects of mobile payments, or create their own alternatives.

 “Payments have to connect to the larger business,” says Mark Fischer, another panelist and CEO of Inspire Commerce, a merchant services provider based in Boulder, CO. While technology companies, retailers, and phone makers are positioning themselves as gatekeepers of the mobile wallet, banks and credit unions have the most pull in driving actual adoption because consumers already associate them with various payment activities.

One cuttingedge solution from Australia’s Commonwealth Bank demonstrates the potential for bringing various mobile payment activities together in a concise, branded interface.

Its Kaching app requires the use of a special case for NFC point-of-sale payments, but also allows payments to fellow customers and other consumers using email or Facebook. Add these capabilities to the rest of their mobile offerings (99% of features from online banking are available in the app) and it’s clear that Commonwealth has successfully created a one-stop shop that’s close to replacing the user’s physical wallet.

And Kaching is no fluke. Last year, it was reported that Pentagon Federal Credit intends to incorporate NFC as part of a VISA driven digital wallet, and CoVantage Credit Union ($944M, Antigo, WI) is also looking to roll out a NFC solution for its mobile wallet in the next few months, says NFC


April 11, 2012


  • Thanks for including the links that define the bigger picture. Now if they could just manage to put a secure driver's license on my smart phone, and all those key cards that get me loyalty points, we'd really be going places. I can already pay for my Starbucks with my phone, and love it that some stores like Barnes & Noble let me show my coupon from my phone instead of printing it and bringing it with me. My smart phone hasn't boosted my IQ, but it certainly aids in most aspects of my life.