Text Receipts Latest Efficiency Innovation
The text and email receipt options that have helped spur retail evolutions with mobile phone payments could soon be available to credit union members.
Complete Data Products, a Troy, Mich.-based firm that began supplying equipment for back office operations in 1986, has a program that enables a teller to either print members a receipt or to send them one to their email or as a text message to their mobile phones.
“We are core gnostic in that we can work with whatever core processor a credit union might be using,” explained Joel Abramson, director of business development for the firm that serves roughly 500 credit unions.
Abramson said CDP began to investigate developing technology to offer financial transaction receipts by phone after it saw the demand increase for emailed receipts.
“In a lot of ways, the case for text message receipts is even more compelling than for email,” Abramson said. “But we could get email receipts done more quickly.”
Being able to get receipts by text or email has been a driver of consumer enthusiasm for Square and other payment systems that enable small retailers to turn a mobile phone or tablet computer into an on-the-go payment system.
According to research from the Pew Research Center on Technology, 9.8 trillion text messages were sent in 2012. Additionally, 80% of Americans that have mobile phones used texts and 95% of them are read within a few minutes of their arrival.
“This means that text messages are a principal communications wave,” Abramson said. “Ubiquitous and timely, which means credit unions want to be in the space too.”
Where a retailer might have to ensure a customer's card number nor other personal information are included on the receipt, a credit union has to make sure that account numbers remain secure on receipts that indicate a payment, deposit or withdrawal has been made to the account. To accomplish this, the software allows a credit union to mask all or part of an account number or other critical personal data behind a pattern of Xs for the member's security.
“We have really tried to build security awareness in to every part of our systems,” Abramson said.
The first text a member receives will not be a receipt but contain a link to validate that the phone attached to that number actually belongs to that member, he explained. Once the text is received, the member clicks on the link which validates the phone and proceeds to the receipt. This additional step only occurs with the first text message, Abramson noted. A similar technique validates a member's email identity.
Abramson said the new system doesn't change the tellers’ workflow. Instead of selecting print or email for the receipt, the teller chooses text. The teller is prompted for the client's phone number or is asked to verify it, if previously used. The client will then receive a text with access to the receipt.
Since the ability to receive receipts via text is tied to phone numbers and not to the actual phones the members will not have to go through the first text procedure every time they update a phone.
Abramson said credit unions should consider text receipts a cost-savings measure rather than the latest technology novelty. The company cited the results of a 2010 study from the Tower Group that found the costs of handling a member transaction at a phone center was $3.75, $1.34 at a branch, 60 cents at an ATM and 14 cents via a mobile phone. Members wait less time, the credit union uses less printing supplies and makes printers last longer, he added.
The technology is new enough that few credit unions or banks have yet deploy it, according to CDP. Wells Fargo has an automated system attached to some of its ATMs that will allow the machines to send receipts to customers’ mobile phones.
Two credit unions that plan to deploy the text receipts in the coming months said they chose to implement the technology because they feel their members will like it and fulfills another step towards greater efficiency.
The $295 million Ohio University Credit Union in Athens, Ohio, has a large percentage of student members who are very open to text receipts and wondered why they had not been able to have them before, said Jean Blair, vice president of technology.
“They really are very phone focused,” Blair said. “Some of them don't even have email accounts.”
The credit union was also drawn to the technology because it fits easily into existing teller procedures. It also saves paper, saves wear and tear on printers and the tool doesn't take extra time, Blair said. Once OUCU finishes an annual review and update its members’ phone numbers, the receipts are set to launch around June 10.
The $86 million Community Service Credit Union in Huntsville, Texas, opted for the new technology because it had already chose other tools that its 9,000 members gravitated towards, said Patsy Lindamood, chief financial officer. With students from an area university comprising part of the credit union's field of membership, CSCU is hoping to boost penetration even more.
Eric Weikert, managing director with Cornerstone Advisors, a Scottsdale, Ariz.-based financial technology consulting firm, said while text receipts are new to the financial services sector he predicted interest will grow.
“It's just a matter of time for the technology to catch up in banking,” Weikert wrote in an email to CU Times. “I believe e-delivery will be the preferred delivery method for most members by 2020.”
Most credit unions now have electronic receipts where members sign a signature pad and the receipts are printed out with the signature and automatically archived to imaging so they will be ahead of community banks, Weikert explained.
“Now, it's just a matter of connecting the back-end to either email or text. I think email will be the first alternative delivery option to take off. It's the real-time nature of members wanting an instant receipt that is the biggest stumbling block today.”