by: Henry Meier
It’s been about a week now since Apple engaged in what’s become the adult version of Christmas Eve when it previewed its newest must-have gadgets. You undoubtedly have heard by now that Apple will be unveiling a mobile payment system with enhanced security features. Its modest goal isto make plastic payments obsolete and it has already signed up the largest banks in the Country and Navy Federal Credit Union. These institutions have agreedtogive Apple a piece of every iPay,sorry, I mean Apple Paytransaction.
If you think that mobilepayments will continue to be a small part of the transactionsmarket, or if you think that several competing platforms will be sufficient to meet thepayment needsof your members, thenyou will disagree with everything I am about tosay. If, on the otherhand, you believe, as I do, that an 800 poundgorilla with the potential of upending traditional banking models hasjust entered the room, then you should keep on reading. Here are some of the biggest challenges that Apple’s entry into mobile payment presents to your credit union.
- The credit union industry is not exactly fast on its feet, but my guess is on a practical level you will have to decide quickly if you want your members to be able to access Apple Pay with their debit and credit cards. (All those people who pre-ordered their IPhones are going to be mighty upset if they realize they can’t use Apple Pay) If you answer yes, remember that this is going to cost money. If you answer no, then you run the riskof members establishingalternativefinancialrelationships with those institutions that sign up.
- On the bright side, Apple may have the leverage to prod merchants into upgrading their systems. As I understand the technology, merchants will have to equip their storesto handle Apple Pay transactions. As the merchantsdo so, perhaps they will bite the bullet and retrofit their machines for EMV cards, as well.
