LAS VEGAS–The word “wallet” comes with a lot of “baggage” in the digital payments space, but it remains the key to keeping credit unions relevant and involved, according to Paul Fiore.
Fiore, the founder and CEO of CU Wallet, known to many for his work in creating Digital Insight, predicted that much of the uncertainty around digital wallets will be settled when Chase rolls out Chase Pay later this year.
“All a wallet is is a container; it’s a way to remove friction from the process, but it requires a network, and that’s the mode we’re in now,” said Fiore in remarks before NACUSO’s annual conference here. “It seems daunting now, but five years from now you’ll see how critical the time we’re in now is.”
Taking a historical look at payments, Fiore noted that in face-to-face payments there was always generally the issue of established trust. That disappeared with the advent of the Internet, which has also brought the market to a position where the payment is now integrated into the shopping experience.
“Everything now is about saving time, especially for Millennials,” said Fiore. “There is an incredible abandonment rate when there are a lot of steps involved.”
The companies that have trust in addition to an efficient payments processing platform will be those that are ultimately successful, he said.
Where credit unions want to be, said Fiore, is in the “gatekeeper” position in addition to their traditional role. Trusted gatekeepers are where the value is, he said, pointing to Priceline.com as an example. Its $64-billion market cap exceeds that of Starwood, Marriott, Hyatt, Hilton and Intercontinental hotels combined.
“As a financial institution you have the members’ prior consumption history, their dollars, their demographic history,” noted Fiore. “So the open question is who will be the gatekeeper and extract a percentage of every transaction?”
And the answer, believes Fiore, is in becoming that wallet of choice for members, which is why CU Wallet seeks to establish the credit union as a larger part of the buying process.