MADISON, Wis.—Saying CUs are in the “eye of the Apple Pay hurricane,” one analyst says now is the time to make a decision regarding the new payment solution—one way or the other.
“I think it is important to make a deliberate choice, and have a clear reason for either decision,” said Michelle Thornton, manager of core products for CO-OP Financial Services, adding that no strong indications exist that Apple Pay might flop. “I will say, that if you choose to go with Apple Pay that you are not likely to be at risk of betting on the wrong horse. Apple Pay would have to do something shocking to make it a bad risk.”
Thornton said that credit unions need to keep up with the fast-growing payments market, and millennials’ interest in the channel in particular, without investing too much in one solution.
“And Apple Pay seems to fill that need,” said Thornton, noting FIs give up to Apple a small amount of interchange and some of the payment relationship. “You can get on board with Apple Pay at a manageable expense and the credit union won’t be excluded from also exploring other options.”
Apple 'Fanatics'
But to stand by now and do nothing is a greater risk, she said. “Apple fanatics are that—fanatics. If you don’t participate, expect to see someone else’s card moving top of wallet with many members,” said Thornton during a CUNA Mutual Group webinar on “Managing Risks For Emerging Payments.”
Michelle Thornton, CO-OP FS
Saying no to Apple Pay, she noted, also signals to members that the CU is not participating in a new mobile wallet that offers greater security. “Participating in Apple Pay does bring a certain luster to the credit union. So if you are deciding to participate in Apple Pay, the sooner the better, because there is no better time than now,” said Thornton, adding CUs can be part of the new mobile payments solution wave while consumer interest is building.
Thornton acknowledged that Apple Pay still faces hurdles. Pointing to a holiday season shopping poll of 170,000 iPhone households that revealed 4.6% of respondents used Apple Pay, 31% were unaware that retailers accepted Apple Pay, 25% forgot to use Apple Pay, 32% were unfamiliar with how to use Apple Pay, and 11% did not know Apple Pay existed.
Those statistics, emphasized Thornton, point out that going with Apple Pay requires an investment in member education. “You don’t want to roll out Apple Pay and have it die on the vine,” said Thornton, emphasizing the need for marketing and member educational materials, and a marketing plan. She reminded CO-OP offers those customizable tools on its CO-OP Marketing Portal.