Now Trending in Payments Tech

Transcription

1 Now Trending in Payments Tech

2 Introduction Telephone banking. Text alerts. Just a few years ago, these were the must-have capabilities for tech-savvy consumers in search of mobile convenience. But the technological landscape has been changing fast. In the age of smartphones and mobile apps, consumer expectations are greater than ever. On the following pages, you ll learn about the trends that can sharpen your competitive edge, including digital wallets such as Sprig by CO OP, and remote card management such as the Card Controls and Alerts technology developed by CO OP. You ll also gain quantifiable insights into the mobile habits and goals of today s always on the-go consumer. Now Trending in Payments Tech 2

3 Contents Mobile Insights Credit Unions Excel in the World of Virtual Payment Services 4 Tech Advancements CO OP Introduces Remote Control Card Management 5 At a Glance Trends Show Preference for Financial Mobility 7 Now Trending in Payments Tech 3

4 Mobile Insights Credit Unions Excel in the World of Virtual Payment Services Virtual payment services are being developed so rapidly that they are poised to change the world of personal finance but why? And what does this mean to credit unions? The short answer to the first question is that consumers have changed. Today s consumer has a kaleidoscope of options to access their most critical, need-on-a-daily basis data: their contacts, their calendars, their photos and videos, and their finances. With technology, people can connect instantly and they do. Mobile devices might as well be an extension of consumers arms. It s no wonder that consumers want to connect with their money differently as well. In the same way that people once wouldn t dream of leaving the house without a traditional wallet, they re now looking at navigating the world with digital wallets. By storing and maintaining this information digitally, consumers can access and use their payment tools wherever they want whether at a virtual place like a shopping site or a traditional retailer with the technology to process these payments. Payments are a natural priority, but they re also an area of concern, as consumers and financial institutions alike worry over the security of digital payments. It s easy to see how these emerging payment tools are going to grow in importance, but this still remains an emerging opportunity. Most people aren t already dedicated to a particular option. And no one has launched a multi-institution, multifunctional killer app in this category. If you look at the types of activities consumers want on the fly, they re fairly straightforward: They want to be able to check their balances and account histories, to see what s going on with their accounts. They want to be able to transfer money between their accounts. They d like to transfer money to a friend, even if that friend has an account at another financial institution. They want to deposit checks remotely no visiting a branch or ATM. They d like text alerts when something significant is happening. And they d like to be able to pay their bills digitally. So what does this mean to credit unions? They are actually in a good position to capitalize on these changes. This is because credit union members already enjoy access to technology above and beyond what the average bank customer has: More credit union members use online banking three times or more per year 73 percent versus 70 percent for large national banks. Credit union members are much more likely to say their financial institution does an excellent job of providing innovative technologies 60 percent versus 49 percent for big banks. 85 percent of credit union members say their credit union is excellent at providing online and mobile access. Clearly, credit unions are already doing a good job of providing online and mobile convenience to their members. And that s a great position to be in as our society moves into the world of emerging payments. About the Author Diane Zablit is Senior Marketing Manager, Mobile/Virtual and Interactive, with CO OP Financial Services, Rancho Cucamonga, California. She can be reached at diane.zablit@co opfs.org and , ext Now Trending in Payments Tech 4

5 Tech Advancements CO OP Introduces Remote Control Card Management Mobile technology that enables cardholders to monitor, control and interact with credit and debit card accounts on the fly, around the clock, is now a reality. Here are the key points you need to know about a significant development that can make the cards you offer even more valuable to your members. See It in Action How does remote control card management work in the real world? Let s take a look at some examples. Features at Your Fingertips Card Controls and Alerts technology developed by CO-OP lets cardholders: Turn cards on and off. Control by: Geographical location Type of merchant or transaction Individual user Spending limits and budgets Help reduce card fraud using in-app alerts. Respond interactively to changing situations. Build Loyalty Remote control card management technology lets you empower your members to do what they can t or otherwise wouldn t. It s not as good as technology it s a real innovation. Wins market share and increases usage. Reduces fraud loss. Minimizes impact of fraud on usage. Enhances member experience. Increases mobile engagement. Lost Card Anna thinks she left her card in her school locker. Using her smartphone app, she turns the card off immediately. Later, she finds the card at school. She quickly turns the card back on, in time to use it later that day. Spending Controls George wants to cap his credit spending at $400 monthly. He sets a $400 limit with his card control app. He uses his card with confidence, knowing he ll be alerted if he spends too much. He can adjust the limit immediately as needed, if his spending requirements change. Location-Tracking Marcela uses the follow me locationtracking feature. An attempted purchase in Texas triggers an immediate text alert to her phone, in Maine. Based on the control setting of follow me, the transaction is denied. At this point, Marcela might want to turn off her card, since it appears that someone else is using her card. Or she may remember that she gave her son her card and he is in a different location, so she would immediately turn off the follow me setting. She doesn t need to contact a call center and, even better, doesn t miss a connection. Now Trending in Payments Tech 5

6 Selected Features Consumers Want in a 21st Century PFM Tool Which capabilities hold the greatest appeal for members looking to take control of their finances? Here s what they have to say about what they want in a PFM tool. Cost Controls for Card Issuers The mobile controls and alerts made possible through remote control card management also have potential cost benefits for credit unions. We ve said that the technology builds efficiency. Here are a few numbers. Tier 1 Tier 2 View all account balances Personal finance alerts Comparison pricing 38% 37% 49% MOBILE ALERTS SAVE $ 19 yearly per user in service costs AND ANOTHER $ 9.22 for interactive alerts STOPS 50 PERCENT of fraud attempts Source: Road Map to Alerts 3.0 Javelin Strategy and Research Tier 3 Card-reward recommendations 31% 0% 10% 20% 30% 40% 50% 60% August 2012, N=3, Javelin Strategy & Research Mobile-toting Americans demand simplicity, anytime convenience, immediate answers, pre emptive alerts, personally relevant information and advice, an attitude of transparency and time saving options all done safely and securely. MARK SCHWANHAUSSER, JAVELIN Now Trending in Payments Tech 6

7 At a Glance Trends Show Preference for Financial Mobility The current usage patterns and aspirations of smartphone-carrying consumers make a graphic case for the potential of digital wallets such as Sprig by CO-OP, and remote card management such as the Card Controls and Alerts (CCA) technology developed by CO-OP. Taking Control Mobile wallets and card controls aren t about shiny new technology. They re about empowering your members to create a financial nerve center using the mobile tools already central to their lives. 150 Number of times the average smartphone user touches their phone each day NUMBER OF MINUTES they wait before checking the phone again 1 PERCENT 95Leave their smartphones on and with them 24 HOURS A DAY 2 MOBILE is different than online banking. With mobile you always have your branch with you. Steve Streit, Green Dot What Do Members Want To Do On Mobile? 78 of mobile users monitor account balances 2 $ % 72 % of smartphone users believe smartphone payments will eventually replace cards 3 146,000,000 receive financial alerts 2 CCA lets members: Turn cards on and off Set spending limits and controls Receive alerts in real time Respond instantly in-app SPRIG offers members: Mobile Pay-Anyone P2P Real-time transfers within network Mobile banking with RDC Account aggregation across credit unions 1 Source: NOKIA. 2 Source: Javelin Strategy & Research. 3 Source: Harris Interactive. CO-OP Financial Services 9692 Haven Avenue Rancho Cucamonga, CA CO-OPFS.ORG CF1409 Now Trending in Payments Tech 7