ARLINGTON, Va.—Credit unions not embracing digital commerce today risk losing member relationships and payments revenue, one person is cautioning.
Rita Ramirez, VP of emerging payments at MasterCard, described to those attending a NAFCU webinar on digital commerce Friday how mobile commerce is reaching consumers in increasing numbers of ways. She explained how washing machines can order supplies, refrigerators can self-diagnose problems and call for service, and cars can connect to the home thermostat to turn up the heat before the driver pulls in.
“This connectedness offers far greater opportunities to create relationships with consumers than just plastic cards,” said Ramirez.
But smart choices need to be made today, as well as attention paid to threats to the member relationship, she said.
“There are a lot of traditional and non-traditional payments options vying for your members,” said Ramirez. “There are a lot of players, lots of mobile wallets, and lots of different ways to do payments.”
Ramirez talked about the big impact Apple Pay has had on moving mobile payments forward, and the immediate affect it has had on cardholders—with Apple Pay saying that it has already signed on its one-millionth consumer. And some merchants, she said, already say Apple Pay is accounting for about 1% of their transactions. “At this early point, that is a tremendous amount.”
Like other analysts, Ramirez said it is important to pay attention to Apple Pay and enroll if it fits with the CU’s payments strategy—particularly since consumers are asking for the service.
But she also said “there is a world beyond Apple Pay. So you should not just focus on that.”
Ramirez insisted that the CU can sign on with Apple Pay but should also control its own “destiny” by offering another digital wallet solution that lets the credit union maintain strong branding, payments revenue, and controls members payments data and consumer messaging.
“We think that Apple Pay is just one of many third-party wallets to come,” said Ramirez, cautioning that Apple takes a chunk of the payments revenue and controls the branding experience. “(With Apple Pay) think about yourself as being a tenant.”
Ramirez pointed to other emerging threats, such as CurrentC offered by the Merchant Customer Exchange. But she also advised that one of the biggest threats to the member payment relationship has been around for a while.
“We think PayPal is a big threat because they are vying for your members,” said Ramirez. “They want to take those transactions, and even upsell your members to different types of payment products, like Bill Me Later, and create that relationship.”
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