Holiday shopping is almost upon us! Black Friday is Nov 29th and many of your members will likely plan for this infamous holiday event by combing through online ads, emails and in some cases, old-fashioned newspapers. All that research and strategy can pay off if they happen to score a crazy price on electronics!  While there’s no doubt some planning took place beforehand, very few people would think of the technology they will use to make these purchases. Their mobile wallet? A wearable-based payment system? Is using a physical credit card going to become a thing of the past?

For the past several years, the financial industry has claimed the P2P market was finally going to take off. While P2P payments have certainly continued to grow in popularity, they have not reached the heights that FIs anticipated. However, in the past year, P2P platforms have experienced immense growth, especially among big banks. Zelle launched back in September of 2017 and in 2018 they have made tremendous strides with larger FIs. Zelle is already working with 51 big banks and 200 more are under contract to launch in the coming months. However, with larger FIs under their belt, Zelle is also looking to win the hearts small and mid-sized credit unions.

At one time, fraud involving mobile Remote Deposit Captured checks (RDC) was an easy scam for those looking to take advantage of a system loophole within the new technology. In short, they used the system's initial design limitations and gaps in the framework to double-dip on the same check. After using RDC to add money electronically to their account, the scam-artist would then also walk into a branch - or any money cashing location - and get actual cash for the same check. They took advantage of the small window of time when the bank or credit union's system had yet to catch up electronically to record the transaction containing the check's initial deposit. As simple as it sounds to outsmart the system, ultimately many of these 'ingenious' scammers got caught, as they often used their own account to deposit the money. Brilliant!? Not so much.

Watching the mobile payments market is enough to make you dizzy. One day it’s all the rage, then the hype dies down as we learn that mobile payments represented only 4% of transactions in 2015. Now the user behavior of millennials is projected to cause a huge spike in mobile payment transactions in 2016 and beyond. So what gives?

To say nobody cares about mobile payments is a bit of an exaggeration, but the numbers are pretty dismal compared to what analysts expected as we kicked off 2015. The Federal Reserve's Consumers and Mobile Services Financial Report for 2015 suggests that only about 4% of consumers actually use mobile payments today, and that only 13% of consumers have actually attempted a mobile payment.

New stats indicate that millennials will drive the future of the mobile wallet.  They are the up and coming group considered "mobile disruptors" that are reshaping the thought process of the payments industry. As wearables and mobile wallets pick up momentum with the younger audience, it's important for credit unions to understand behavioral trends not only for payments, but also for money transfers within mobile banking.

Apple wants to own your members’ wallets.

If you didn’t think Apple Pay was just the beginning, maybe a quick historical refresher will put things into perspective. Remember when the only carrier you could purchase an iPhone from was Cingular (Now AT&T)?  Believe it or not, that was 2007. It was contract exclusivity and it lead to tactics such as ‘jailbreaking’ and ‘bricking’: People wanted the iPhone, but not on AT&T’s network. Some experts believe Apple’s exclusive contract with AT&T was a trillion dollar blunder; did they realize there was more at stake than just money?

The payment technology industry changes like the wind with new players always working towards getting into the game. Whether it's driven by the phone carrier or financial institutions, new mobile banking apps and "mobile wallet" options are being developed in hopes of growing that market segment willing to trust their phones to also act as their wallet. And now the newest entrance to this market is expanding to more banks and credit unions.

Now that retailers have been ‘encouraged’ to accept chip-and-PIN cards, transactions have become a little more annoying.  Until recently we all would have agreed that it was easier to just pull out your card and swipe it.  Mobile payment apps actually provide for a marginally faster transaction process than swipe (0.4 seconds faster to be precise) and are a little friendlier. Especially since everyone in the check-out line is staring at their phone anyway!  Not to mention the reduced need to carry a wallet.