Your members aren’t leaving…yet

Mobile payments have been in the news a lot lately.  If you’re a paranoid sort of person, credit unions need to add mobile payments to their mobile banking application in a hurry or risk losing members.

Some believe that Apple, Amazon, Facebook and Google are going to corner the market if you take a “wait-and-see” approach.  They have access to hundreds of millions of customers.  And we know that customer payment data is the true gold that they’re after.

Financial institutions have one good thing going for them, however.  According to one study, 46% of consumers aged 18-34 and 44% of consumers aged 35-44 would prefer that their financial institution provide a mobile payments service for them.

I definitely fall into that 44%.  But I don’t think Facebook and Google are that big of a threat.  Apple and Amazon, however, already have credit card information for their customers.  Those two pose a bigger long term threat.

In the short term, there are already companies that are either leading in mobile payments or have positioned themselves to become leaders.  How many of you have the Starbucks app on your phone and use it for payments?  11% of Starbucks sales volume now comes through their mobile app.  This accounts for about four million mobile payments per week, used by eight million consumers.

Just last week, I made another discovery; Chick-fil-a now has a mobile payment option for their app.  If you don’t know about Chick-fil-a, you better ask somebody.  Chick-fil-a is one of the nation’s most successful fast food chains and recently passed KFC as the biggest chicken food chain with 60% less stores.  Oh, and they’re closed on Sundays.

So now my favorite fast food chain has a mobile app with a payment option?  Geek heaven.  And in case you didn’t know, McDonald’s is also quietly testing a mobile payment app.

These are the companies that credit unions need to worry about.  Take a look at your phone.  See any other retail apps that could have a mobile payment option in the future?  On my phone, I have Walmart, Target, Best Buy, 7 Eleven, Bi-lo, Harris Teeter and Barnes & Noble.  Walmart is the scariest because they actually offer financial services.  I’m sure you can think of other retail apps.

These companies will help your members become more comfortable with using mobile payments.  Ultimately, most would rather use your app for their mobile payments.  Continue to ignore this…well, there’s always Apple, Amazon, Facebook, Google and PayPal.

George Pasley

George Pasley

George Pasley is the founder of iMazuma, a web software company based in Charleston, SC. iMazuma specializes in back office automation software and recently launched FS Vendors, an online financial ... Web: www.imazuma.com Details