Mobility Matters: Tracking the Mobile Banking Revolution in Credit Unions
One currently has no mobile wallet product, the other has one that failed, but the ironic reality is that all eyes in mobile payments presently are fixed on tech giants Apple and Google.
As for Apple, the buzz is loud that the next iPhone will be released mid-September. As per its custom, Apple is close mouthed about specifications, except it has announced a new wallet app, to be integrated into the next release of the mobile operating system (iOS 6), that is called Passbook.
Said Apple on its iOS 6 Web page: “Your boarding passes, movie tickets, retail coupons, loyalty cards, and more are now all in one place. With Passbook, you can scan your iPhone or iPod touch to check in for a flight, get into a movie, and redeem a coupon. You can also see when your coupons expire, where your concert seats are, and the balance left on that all-important coffee bar card. Wake your iPhone or iPod touch, and passes appear on your Lock screen at the appropriate time and place — like when you reach the airport or walk into the store to redeem your gift card or coupon.”
The big question: will Passbook power in app purchasing on an iPhone? Nobody who knows is talking. Speculation among third party experts is strong that the next iPhone will not feature a near-field communication chip (“Apple does not have a history of technology innovation,” said David Mahdi, a manager at security firm Entrust, and NFC still is in the very early stages of rollout.
But there is plentiful wondering about Apple’s willingness to build in, say, an in-app QR code that could enable purchases (very simple functionality with the sole limitation that to work there needs to be cellular signal). Experts agree that would be easy, and it would probably be within Apple’s comfort zone. But nobody knows if it will be on the phone.
Table this discussion until mid-September. That’s when Apple will lift this kimono.
Google Wallet: The reality is that the first iteration of Google Walletplainly stumbled – on one phone, only on Sprint, and requiring a Citi pre-paid card, usership was widely thought to be anemic. But just recently Google has revamped its Walletand, said Mahdi, “it’s a more open, more appealing product.”
Literally thousands of merchants already are set up to handle Google Wallet payments. Marquee accounts include Macy’s, Jamba Juice, Bloomingdale’s, OfficeMax, CVS and Radio Shack.
Google also has opened the Wallet to accept just about any credit card.
A catch is that the app still works on only a half-dozen Sprint and Virgin Mobile phones (also Google’s Nexus 7 tablet, although few see tablets playing a sizable role in in-store m-commerce).
Don’t count out Google, stressed Mark Fischer, CEO of Inspire Commerce in Colorado, a financial transaction technology company. “They have made mistakes with Google Wallet – they know it. And they will correct this.”
Probably the biggest question revolves around Google’s interest in carving out a slice of interchange revenue for itself and at least some experts said that is unlikely. “I don’t see them being interested,” said Jeff Russell, CEO of TMG Financial Services in Des Moines, Iowa. “Their history in payments is that they are not interested in collecting small fees.”
“Google has always been more interested in collecting user data to fine tune advertising,” Russell said.
“Google can be very disruptive,” added Gene Signorini, a vice president at Mobiquity in Wellesley, Mass. His point: if a potentially large player in the payments processing space effectively disdains interchange fees, what does that mean for the card companies and financial institutions that very much want to sustain the flow of this fee income? Hard to say – Google is far removed at this point from importance in payments – but that day very well may come.
“Credit unions definitely need to be watching what Google is doing,” said Matt Hodson, marketing director at the $70 million Health Care Credit Union in Salt Lake City.
Hodson admitted that he personally is a Google Wallet customer – “I’ve had the phone four months. I wanted to see what we as a credit union could do with the technology. It really is easier to pay with the phone than with a credit card swipe.”
“People,” he added, “take their phones everywhere.”
Hodson also admitted that Google Wallet is not prime time yet – but his concern is that when it is, he wants to be ready. “We want to be where our members want us to be.”