Vanguard explosions in technology have taken the notion of paying with plastic to the next level with mobile wallet.
Mobile wallet is essentially a way to make payments to merchants using your smartphone as opposed to a credit card. The “wallet” app is linked directly to the consumer’s transaction account and is often associated with special discounts or rewards at specific partner merchants.
Why go with mobile wallet over simply using a credit card? One reason is that any type of merchant loyalty program can simply be linked to the app instead of having to carry a punch card or an additional membership card. Additionally, merchants can link coupons directly to your mobile wallet app so you won’t have to fumble or even remember to bring coupons on your next shopping jaunt. Another attractive aspect is that often times, mobile wallet users can skip long lines at busy retailers because the consumer can pay electronically.
Some experts have voiced concerns about the technology’s safety and wonder what would happen if the user lost his or her phone. John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League told Fox Business that unlike a credit card, the user can password protect his or her mobile phone and can be remotely disabled if necessary.
"If you are linking a credit card or a debit card to your mobile-wallet account, then you're still pretty well-protected by federal rules that require things like allowing you to charge back fraudulent purchases," Breyault says.
Although the technology is still emerging, credit unions are gearing up to provide its own special version of the mobile wallet solution.
Recently, CU Wallet described the product launch as one that combines high-tech innovation with direct credit union ownership. CU Wallet's mobile payments platform is designed by credit unions, for credit unions to meet the needs of an increasingly mobile membership base, attract a new generation of members and generate new, sustainable revenue streams.
Creating CU Wallet was vital for credit union participation in this technology. "If you look at the currently available wallets, we don't think they are ready or operating in our best interest. All of them don't allow us to control our data's destiny," Parrish says. "If we had a chance to offer members a credit union centric wallet that would be as good or better than what is out there and be able to control the destiny of our data, to me that is a no-brainer."
Also, in-line with the credit union philosophy of community, CU Wallet will focus on both national and local merchant use as a way to build loyalty programs and provide special member offers.
Currently 15 credit unions plan to offer CU Wallet to members. Paul Parrish, executive vice president and CFO of One Nevada Credit Union ($681 million, Las Vegas, NV) said in a statement, "Mobile wallets should be a strategic priority for every credit union. We've evaluated third-party mobile wallet solutions currently available in the market, and there isn't a viable choice for credit unions. By aligning the credit union industry in a collaborative initiative, CU Wallet is providing a solution that will meet members' demands, while protecting and building member loyalty."
Another credit union on board is CommunityAmerica Credit Union ($1.8 billion, Lenexa, KS). "We've seen significant mobile adoption at CommunityAmerica, and we believe mobile wallet adoption is in the near future," CEO Dennis Pierce said in a statement. "Credit unions must be at the forefront of these emerging technology solutions to ensure future growth."
Other credit unions offering CU Wallet either now or in the immediate future include:
To find out if mobile wallet is coming soon, contact your local credit union.By Gina Ragusa