Credit unions are well aware of the growing revolution in payments. A recent report by McKinsey & Company (Global Payments 2015: A Healthy Industry Confronts Disruption) noted that, the growth of nonbank digital competitors over the next five years will increase downward pressure on transaction margins while increasing growth in electronic payments.
The drivers for this trend are all too familiar:
- Large technology companies such as Apple, Google, Facebook, Amazon, Microsoft, Tencent and Alibaba, are some of the most significant nonbank competitors. These organizations are cash-rich and have virtually captive customer bases.
- Smartphones have become a crucial channel in the world of payments. With these devices comes a swarm of payment options. These range from the likes of Apple Pay to “In-App” purchases that provide an almost seamless user experience.
- Member expectations for technology-enabled experiences have grown considerably. Today’s members, like any other consumers, have experienced an unprecedented level of service via nonbank providers. Some may wonder why their favorite credit union does not have the same level of digital service.
Despite all the hype about the electronics payments, adoption by credit union members may tend to be slower than the public at large. Members tend to be more conservative so fewer are likely to be enthusiastic early adopters.continue reading »