Mobile has been an importantstrategic investment for credit unions for some time now, so it isno surprise that many credit unions have launched a host ofsophisticated apps to drive member engagement. Today's mobilebanking apps now feature a wealth of capabilities including fundstransfer, remote deposit capture, personal financial management,debit card on/off functionalities and bill pay.

For the past few years, mobile RDC was generally considered oneof the largest drivers in moving members to the mobile channel, butthe popularity of mobile bill pay has begun to eclipse it inimportance. In fact, the number of U.S. online households usingmobile bill pay doubled from 8 million in 2012 to 16 million in2013, and this level of adoption is only expected to continue togrow. AlixPartners reports that by 2018, 24% of all bill paymentswill be made on mobile devices.

As a result, it is now more important than ever that creditunions offer a mobile bill pay functionality to attract and retainthe next generation of members, especially to ward off similarofferings from their larger, national competitors.

While moving the bill pay process to the more popular mobilechannel will help credit unions drive overall bill pay engagement,credit unions must first overcome the perceived inconvenience ofentering the payee information. While this process can becumbersome through traditional online bill pay, it is often evenmore difficult on the mobile device as entering biller informationon such a small screen can be time consuming and frustrating formembers.

The most important characteristic of a credit union's mobilebill pay technology should be simplicity in ease of use, so todrive bill pay adoption in a meaningful way, credit unions mustroll out more-innovative mobile bill pay solutions that simplifythe bill pay process as much as possible.

So how can credit unions effectively replace the keyboard andcomplete data entry for their members? The smartphone camera is thekey–implementing a mobile photo bill pay tool allows members toeasily pay their bills anytime, anywhere. More importantly, itallows members to automatically add new payees with the simple snapof a photo. Mobile photo bill pay users can also leverage thesystem as a digital file cabinet to store copies of their billpayments.

Mobile photo bill pay is innovative enough to attract today'stech-savvy members, but simple enough for the average user tounderstand. The majority of members already know how to take apicture with their phone, which lowers users' resistance tolearning a new bill pay system. This type of mobile bill payfunctionality is not even offered at the majority of the nation'slargest banks, so credit unions that offer this type of solutionwill have a strategic differentiator and a competitive advantageover much larger institutions.

Alternative mobile bill pay solutions like mobile photo bill payare not only positioning credit unions as innovative solutionsproviders within their respective communities, but increasing billpay adoption has proven to be a key driver of member retention.AlixResearch reports that 28 percent of Americans between the agesof 26 and 34 would be likely to change their financial institutionto gain access to mobile photo bill pay. Additional researchindicates that non-bill pay users are 13% more likely to leavetheir institution, whereas bill pay users are only 3% more likelyto leave – reducing the member churn rate by about 75%.

In addition to driving member retention, mobile photo bill paycan help attract an entirely new segment of members to the creditunion's bill pay services. Some institutions that have alreadyrolled out mobile photo bill pay report that on average, half oftheir mobile photo bill pay users were not previously enrolled intheir institution's bill pay and, as such, represent new bill paycustomers leveraging the institution's mobile channel–furtherdriving member acquisition and retention.

In order to thrive in a hypercompetitive environment, creditunions must offer innovative technology paired with superior levelsof service to attract and retain today's consumers, who have begunto expect more and more functionality from their financial servicesproviders. To do so, credit unions must leverage innovativetechnologies like mobile photo bill pay to protect and grow marketshare or run the risk of losing members to competitors ornon-traditional providers who are stepping in to provide theseservices.

Joe Bellavance is vice president of credit union servicesfor Allied Payment Network Inc. in Fort Wayne, Ind.

CONTACT: (260) 247-9102 or [email protected].