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During the recent CUES Webinar, “Preparing for the Ever-Evolving Digital Wallet,” Sundeep Kapur told attendees that the future of money will include electronic payments, encrypted payments, credit card company innovation, and mobile wallets.
“As an industry, we have seen a lot of this innovation come to market already,” explained Kapur, consultant and founder of Digital Credence. “While some have been successes, others have failed. The digital wallet will continue to evolve as new currencies and faster payment methods are developed.”
Here are four things to consider as payments move forward:
1) Technology innovation – As CUs make technology decisions, they need to remember that people can now move money in seconds. In addition, faster payment networks and big data are leading to a more personalized digital banking experience. “We’re learning that businesses and consumers prefer mobile as a medium of transaction which can be leveraged,” he said. “Many of us have gone to a retailer who offers to send you a digital receipt. Do you offer this to your members when they make a transaction at a branch or an ATM?”
2) Regulation and compliance – In addition to paying attention to the latest from traditional union regulators, watch things like the cybercurrency Bitcoin, which is definitely legal—and provide anonymity to those who want it, Kapur said.
3) Demographics – Millennials have adopted mobile payments and rely heavily on cash, while Baby Boomers tend to use credit cards and electronic payments, he noted. Young adults are the most underbanked and an area of opportunity for credit unions. Still, some banks have made headway in this market by making it easy to open an account online and building a relationship from there.
4) International implications– Kapur also recommended paying attention to security and anonymity trends in Europe, and to micro and macro pilots in different parts of the world that are driving alliances, technology, regulation, personalization and adoption of digital wallets and payments.
“Credit unions will be successful in this ever-changing landscape if they keep a pulse on the major fintech players and begin to think outside of the box when it comes to payments technology that will benefit their members,” he added.
Dana Murn-Kohal is CUES’ professional development and innovation manager.
