Industry experts have been declaring every year the year of the mobile for the last decade and are increasingly predicting this device as the sole future of payments.

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

The biggest challenge in mobile payments today is successfully identifying where this channel fits into the member value chain. If credit 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 combat the challenges of channel adoption:

1. Identify a need

To roll out a mobile payments program in response to competitor activity is not a sound strategic move. Whilst the competition in this space is fierce and doing nothing is risky, members are steadily becoming more fickle and the user experience is essential to initial adoption. The functionality needs to be relevant, easy to use and easily integrated into members' lifestyles.

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

2. Quell fears around risk

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

3. Educate, educate and educate some more

Merely making mobile payment infrastructure available and announcing it to your members is not enough.There needs to be a clear use case presented to your members that covers both the advantages of adopting the mobile channel and ease of use. The key challenge here is to avoid early signs of doubt as this will only lead to disinterest. One of the best solutions to member education is staff engagement. Your staff members are the face of your business and with the right training, can easily be trained to become mobile evangelists.

4. Offer incentives to drive behavior

Another key challenge that credit unions face is bridging the gap between consumer awareness and consumer behavior. A notable way to 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 automatic discounts such as cash back, todays' consumer finds it hard to resist a great deal. One good experience can encourage repeat behaviour, and getting members to use this technology in the first place is the greatest hurdle. Offering rewards is an excellent place to start.

5. Differentiate

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

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