Primary financial institution status now depends on enrolling members to make payments through your CU. By Jamie Swedberg This is bonus coverage from "The Mobile Banking Prize" in the upcoming May 2016 issue of Credit Union Management magazine. 
What makes a credit union a member’s primary financial institution? Is it whether the member has a checking account with the CU? Not anymore. It’s whether the member makes regular, everyday payments through the institution. That means credit cards and debit cards, ACH transactions and, nowadays, it also means mobile payments. The role of mobile payments gatekeeper is critically important, says Paul Fiore, founder and CEO of CU Wallet, Los Angeles. That’s why Apple, Google, Facebook, and PayPal are trying to be in that position. He draws an analogy to third parties that book hotel rooms, but don’t themselves own the properties. “Maybe you’re on the United Airlines website,” he says. “You tell it what city you're going to and what night you're staying and, with one extra click, you could book a hotel. United earns the ancillary revenue from that, and the consumer gets the convenience of not having to log in somewhere else to get a car rental. That's what we're asking credit unions: Do you want to be in that position?” Credit unions don’t sell restaurant meals, groceries or gas, but they do have the ability to act as the intermediary in all those transactions if they offer a “wallet”-style point-of-sale payment feature. “What is the value of knowing the member, having their trust, having their balances on deposit at the financial institution, and having a mobile banking app that the member logs onto all the time”? asks Fiore. “There is already a logical value for the credit union to be that gatekeeper when the member shops.” Richard Crone, CEO and founder of Crone Consulting LLC, San Carlos, Calif., says the key to winning the mobile app game is enrollment and active use. To make the most of mobile opportunities, credit unions should market their own branded mobile payments strategies, not merely offer a third party’s mobile wallet app. “I call it Crone's Rule,” he says. “The one who enrolls is the one who controls. The one who enrolls the member in a mobile banking app is the one who controls the opportunities for extending new services in context, in the wild, where they are needed most. That's not at a branch, not at an ATM, not at the contact center. It's in people's lives—when they're at the store, when they're online, when they're traveling.”
Jamie Swedberg is a freelance writer based in Georgia. It's not too late to register for CUES School of Payments, April 19-20, 2016, in Chicago! You may also be interested in attending CUES School of IT Leadership, slated for Sept. 27-29 in Charleston, S.C.
