Credit Unions Increasingly Target Mobile Payments, Mobile Banking Options

January 14, 2020         By: Steven Anderson

Once upon a time, a guy had a checking account with an area bank. Then they decided it was high time that he start paying for the privilege of keeping money with them, so he closed his checking account and left. He then went less than two miles away from the bank branch and got a checking account with a credit union, who charged him nothing. That guy was me. So when I heard that credit unions were increasingly pushing mobile payments and mobile banking tools, it really came as little surprise as the credit unions increasingly pose a competitive threat to banks.

Basically, according to reports, this is a move that’s giving credit unions an element of future-proofing. Credit unions are doing well right now, but they can clearly see that conditions are always changing. That leaves them with a need to suppress future issues, and one of the biggest is likely to be the availability of technology.

While credit unions have done a fine job of matching banks, they often fall down on issues of infrastructure because their ability to spend is not so pronounced as larger, more established banks. That’s changed in recent years, certainly, and now another change is due. We’re already seeing credit unions make advances here, like the ability to deposit checks via photography, but there are still some points in which the credit unions lag.

That much is demonstrated by the fact that credit unions are starting to lose income. The third quarter of 2019 saw net income drop 1.1 percent for the industry, and that’s a significant concern.

However, credit unions have a fine line to walk as their primary stock in trade is trust. They effectively built their entire industry on being more solid than banks—and less likely to stick it to customers with fees—so any digital offerings they roll out must come with the best in security and full transparency whenever something’s gone wrong, as it almost certainly will.

Credit unions have made a great case for themselves so far, and as they advance their product lines to keep up with changing technology, they’ll narrow the gap still further. Only time will tell just how well it works, but credit unions have a great proposition already, and will likely have one for a long time to come.