Consumers continue to expect faster point-of-sale payments.
By Mark Sievewright
U.S. credit unions are gearing up for the transition to EMV-compliant credit and debit cards (aka “chip” cards) – a move that has the potential to reduce fraud and increase security in certain payment transactions. A newly released Association for Financial Professionals report shows that 62 percent of surveyed financial professionals reported their firms were targeted by payment fraud in 2014; this same report also shows that 92 percent of respondents “firmly believe” EMV cards will be effective in reducing point-of-sale fraud. But in addition to helping reduce fraud, EMV is part of a broader change in how consumers are paying for goods and services. Consumers can use an EMV card at the point of sale to conduct a contactless “tap and go” transaction. These contactless EMV transactions will feel similar to smartphone-enabled payments, such as Apple Pay, Samsung Pay and Google Wallet, both in terms of how they take place—and how fast. For consumers, the convenience of “tap and go” smartphone and EMV transactions will ultimately drive a demand for faster, real-time financial services – including enhanced mobile banking and payment applications, remote deposit capabilities, loan application approvals, person-to-person payments, automatic payments, bill-pay transactions and account alerts via mobile. The migration to EMV and mobile is a challenge for credit unions that lack the needed resources. Still, credit unions should view the delivery of mobile (and mobile-like) services as a mission-critical, top strategic imperative. In light of this suggestion, here are key tips to keep in mind:
- Embrace mobile wallets: Apple Pay, Samsung Pay and Google Wallet fund payments by charging them to a user’s card. It is important that credit unions enable and encourage the use of their cards in these apps and others. Once your credit union’s credit and/or debit card are entered into a member’s mobile payment app, they will tend to stay there; importantly, being in these apps enables your credit union to retain, and possibly grow, the revenue stream from interchange income.
- Reward members with incentives: Members like to be rewarded for using your cards, and these incentives can help strengthen relationships, while ensuring your credit union remains part of the payment cycle–and receives the related interchange income. In addition, mobile-driven loyalty programs can help drive member adoption of mobile payments.
- Deploy a holistic payments strategy: Additional mobile services, such as real-time mobile alerts, card management and mobile photo bill-pay are cutting-edge solutions that create more relationship value for members, and can help drive adoption of point-of-sale mobile payments.
Based on everything we are seeing ahead of the transition to EMV, it seems inevitable that members will eventually expect seamless mobile access to most services. This can open up many opportunities for enhanced efficiency and expediency–both of which benefit credit unions and their members. A golden opportunity awaits for credit unions looking at EMV as a conduit toward increased mobile payments and related innovations that enhance members’ lives.
Mark Sievewright is president of credit union solutions for Fiserv, a CUES Supplier member based in Brookfield, Wis. Talk tech trends with your peers and expert presenters when you attend CUES School of IT Leadership, Sept. 15-17 in San Antonio.
