Industry expertshave been declaring every year the year of the mobile for the lastdecade and are increasingly predicting this device as the solefuture of payments.

However, globally cash is still king. Approximately 85% ofretail payments internationally use cash, while nearly 60% of allpurchases of less than $25 are made in cash in the U.S.

The biggest challenge in mobile payments today is successfullyidentifying where this channel fits into the member value chain. Ifcredit unions are serious about a drive toward mobile payments,they need to have a firm strategy in place to ensure success.

There are five key areas that can be addressed to help combatthe challenges of channel adoption:

1. Identify a need

To roll out a mobile payments program in response to competitoractivity is not a sound strategic move. Whilst the competition inthis space is fierce and doing nothing is risky, members aresteadily becoming more fickle and the user experience is essentialto initial adoption. The functionality needs to be relevant, easyto use and easily integrated into members' lifestyles.

In their 2013 consumer survey, McKinsey found that the threemain drivers of mobile adoption were deals and offers, convenienceand integrated payments. No one knows your members better than you,and as such, it might be worth carrying out surveys to see what keyfunctions they think could drive them to use the mobile channel asa regular part of their payments journey. This could lead to thecreation of a channel that is not only simple and user-friendly,but that also balances this with the functional scope they requirein their daily lives.

2. Quell fears around risk

People fear what they don't understand and confusion around thesecurity of the mobile channel has been a well-documented challengethat credit unions need to solve. The best way to address thisissue is to be transparent about the security features you offer:To achieve widespread adoption across your member base, membersmust understand the security measures in place and believe thatmobile is generally as secure as other payment options. If yourmembers are confident and trust in your ability to protect theirsensitive data, they will automatically be more inclined to utilizethe mobile services you offer.

3. Educate, educate and educate some more

Merely making mobile payment infrastructure available andannouncing it to your members is not enough.There needs to be aclear use case presented to your members that covers both theadvantages of adopting the mobile channel and ease of use. The keychallenge here is to avoid early signs of doubt as this will onlylead to disinterest. One of the best solutions to member educationis staff engagement. Your staff members are the face of yourbusiness and with the right training, can easily be trained tobecome mobile evangelists.

4. Offer incentives to drive behavior

Another key challenge that credit unions face is bridging thegap between consumer awareness and consumer behavior. A notable wayto encourage your members to adopt new habits is to incentivize.Whether offering reduced fees, loyalty program integration,increased loyalty points, easier usage of coupons or automaticdiscounts such as cash back, todays' consumer finds it hard toresist a great deal. One good experience can encourage repeatbehaviour, and getting members to use this technology in the firstplace is the greatest hurdle. Offering rewards is an excellentplace to start.

5. Differentiate

Despite the media attention, the initial adoption of thischannel for financial services has been slow. If done with themember experience in mind, credit unions could offer a mobilepayments service that could truly differentiate them from theircompetitors. In addition to tailored loyalty programs, think ofwhat else you can provide to really make your members feel special.While flashy functionality can peak interest at first, relevance toyour members is what will matter in the long term. Whether youoffer the ability to monitor finances and control spending or theleast amount of clicks to make a payment, make sure it is somethingyour members want to use time and time again.

Bethan Cowper is head of international marketing for CompassPlus. Based in the U.K., she can be reached [email protected].