As CO-OP Financial Services gears up to offer person-to-person (P2P) mobile payment services to its member credit unions, now’s a great time to ask, “Do consumers really want P2P?” The financial services industry, at least, seems to be saying yes. Mobile banking mavens are looking at P2P payments as the next big thing in digital banking, with eight out of 10 institutions polled in a recent Forrester Research/Fiserv surveyindicating plans to invest in mobile payment features in the next 12 months. What’s the buzz?
• As more financial institutions provide basic mobile banking services such as branch locators and the ability to check account balances, payments become the new differentiator.
• Outside competition such as PayPal and Google Wallet pose a threat to traditional financial institutions. While consumers probably aren’t ready to chuck their checking accounts in favor of nontraditional payment systems, the more they stray from their financial institutions, the less relevant their financial institutions become.
• On the upside, Fiserv found that 40 percent of consumers trust their financial institutions to handle mobile payments – versus 35 percent for PayPal and only 9 percent for Google. In other words, members want the ease and security of doing mobile payments with you.
• E-commerce features like P2P payments quickly vault from novelty to acceptance to basic expectation. With more than 350 million people already using PayPal and big banks already ramping up their marketing, P2P is going to catch on fast.
• According to banking futurist – and THINK 12 featured speaker – Brett King, meeting consumer expectations is more important than ever: “In the past, if your bank was slow to get Internet capability, you might have complained, but you didn’t necessarily take action,” he says. “Today, people aren’t going to stand for lagging technology. It’s too essential.”
Jon Bartek, Vice President, Sales and Relationship Management for eCom – acquired in late January by CO-OP – points out that P2P payments also share a lineage with online bill pay. As such, P2P promises to help make member accounts stickier. “There’s a correlation between how electronically involved your members are and loyalty and profitability,” says Bartek.
For users of CO-OP’s Bill Pay service, launching P2P is expected to be a snap. “There’s not a bunch of software to buy and it’s not a complex startup,” says Bartek.
Better still, P2P is a simple proposition. “It’s a quicker, more convenient and safer way to send money to the people who are important to you,” says Bartek. “Credit unions are going to have to promote adoption, but this isn’t a service that’s difficult to sell. It’s a nice, new, common-sense way to move funds.”