Dear Diary: Placing Bets on Mobile Payments

Dear Diary,

Anyone who has ever talked to me about when I do for a living, has probably gotten an ear full about my stance on the rapidly changing payment landscape. I am a self-proclaimed mobile payment enthusiast, and proud of it. That being said, every CEO and their mother has their own opinion on how they believe payments will evolve over the course of months to years. I believe the world needs a peon’s perspective, and the justifications behind it, because let’s face it, peons run the world, not CEOs (I’m sure there are CEO’s that would argue against that, but that conversation is for a different day).

There are so many potentially HUGE players in the mobile payment industry, from CurrentC to CU Wallet to Google Wallet, backing just one of these progressive companies is a real gamble. Fortunately, that is what I’m going to do today, place my bet, and I am going to double down on Apple Pay.
To preface my opinions, it is naive to think that there will be only one victor in this battle, however I do believe Apple Pay has what it takes to set the foundation for and shape the future of the mobile payment industry.

Without further ado here the three P’s of Apple Pay’s potential payment success.

The Protection – Mobile payments as a whole, offer an increased level of data security while processing and transmitting data. Apple Pay’s use of biometrics AND tokenization create unique layering of security. Additionally, tokenization delivers a solution to consumers who are concerned about merchant security by promising to not hold or transmit any raw consumer data. Admittedly, as the bad guys get smarter, Apple Pay will have to adapt and invent additional layers of security to continue to protect consumers, but with Apple’s smarts and innovative practices, I don’t find that to be something that will be an issue any time soon.

The Process – Human beings, by way of evolutionary necessity, are innately creatures of habit. Our current payment process/system is ingrained in our brains. We systematically reach for our debit cards, swipe them through a POS terminal when prompted, follow the same cues, and complete a transaction. To upend the payment system, and override such an established habit, the payment process needs to become substantially easier and more efficient. This is where Apple really shines.

Apple Pay is by far the most consumer conscious mobile payment system utilizing NFC technology. It’s easy, clean, and actually time efficient when making a payment considering 90% of us walk around with our phones seemingly attached to our palms. It’s tailored and designed for consumer use, and it shows.

CurrentC’s use of QR codes make this payment method cumbersome. Unfortunately while a large group of merchants is concentrating it’s time to inserting CurrentC into the lives of consumers to avoid paying interchange fees, and thusly creating a larger stock pile of capital for themselves, they are forgetting that complicating the payment process with drive consumers away from using it.

If the payment industry really thinks consumers are willing to shred their current plastics in favor of fumbling with a complicated phone app, they’ve got another thing coming.

The People – Hear me out. As I stated above, upending the current payment system, is a MAJOR undertaking. Companies have been trying for years to integrate mobile solutions into consumer transactions with little to no progress. Suddenly, Apple Pay comes along, and it’s a whole new ball game. Why? Brand loyalty. Apple’s cult following.

Apple’s brand is so captivating, that those dedicated to it, are willing to buy and try almost anything stamped with the iconic partially devoured fruit. They have the consumer base that believes so wholeheartedly in their mission, that they may actually initiate this type of drastic change in our current payment system. Belief and commitment to a vision is enough to change routine, but it will take time and repetition to actually make an impact in the wider world.

There are so many other reasons I’m betting on Apple to be the consistent front runner in the mobile payments industry, but these three major factors that I believe are going to make the difference in their success over others. This race for change is extremely exciting and it never ceases to amaze me rapidly the payment world is shifting. I can’t wait to see the outcome, collect my winnings, and double down on the next big thing.

–The Peon


Can Credit Unions be the P.C. of the Financial Industry?

Today, all whilst basking in the sun of a near perfect spring day in Wisconsin, I stumbled across something which connected some very elusive dots in my head.

First, I would like to preface this post with stating that being a peon in such a vast industry, juggling regulation with missions and visions, I try to stay well versed in the happenings of Credit Union land. My inbox is flooded with daily links and articles and if I am not consumed with daily monotonous tasks, I am reading, soaking it all in. This is where these “dots” I was taking about, came from.

Article after article, interview after interview, I’m reading about issues, lack of innovation, the struggles of relevancy in terms of everything from target demographics to the latest mortgage regulations; let’s not get started on mortgage regulations… In terms of the next big idea, the solution, the one that will work, it is probably out there and I’ve probably read about it.

If all of these issues, and solutions to said issues, are floating around the interweb somewhere, why isn’t anyone doing anything about them? I’ve read theories on that too. One interesting theory poses the idea that our decision makers are just getting too old, stuck in their ways, and refuse to innovate and move forward. Maybe. Another good one portrays the Credit Union world in shambles, losing the people who really care about it and its vision, leaving nothing different then bank tellers and paper pushers working for a pay check and nothing more. Perhaps. I can’t vouch for the validity of either of these ideas, so I will let you draw your own conclusions.

There are more; dozens, maybe hundreds of ideas, waiting to be read by peons across the nation. This is where my lunch break became ever so enlightening.

I’ve just started reading a book by Malcolm Gladwell titled “Outliers.” To include a quick synopsis, it outlines that circumstances in which success in individuals is created. And here, I will shamelessly plug this book because I am really enjoying reading it thus far, and you might too – buy it here.

This particular passage of the book spoke to me, not only because I had a real life application for what Gladwell was saying, but also because it focuses around computers and technology, and short of being involved in the I.T. world, I enjoy my gadgets and all things techy.

Computers were once grand machines, taking up rooms, huge colossal beasts with a price tag to match. Access to them was sparse. There was no such thing as a personal computer, which was O.K. because back in the 60’s and early 70’s, no one knew the computer for anything but the elusive and mysterious creature it was to most. Gladwell explains that during the introduction of the personal computer in the mid 1970’s, there was an age ideal for taking the industry by storm and creating progress within it.

Gladwell goes on to say that if you were too young, you would miss the window as you were in high school and had no means to actively pursue this path. If you were older, you most likely were already employed by IBM and had a pretty good handle on what was going on in the world of computers.

Now we are getting somewhere.

Those smart and stubborn employees, who were just a little too old, a little too seasoned, at IBM thought they had it all figured out. They knew computers, and they were the future. Personal computers were tiny, inadequate machines made for hobbyists, and weren’t worth a second look. Why mess around with this tiny innovation while you were creating comprehensive, gigantic mainframes in a billion dollar industry?

Well we all know why now, don’t we? Personal computers, smart phones, most of us can’t even remember what it was like to live without them, let alone imagine a day where they cease to exist. Oh the agony!
So how could IBM miss this and not jump on the band wagon? How did the leading manufacture of mainframes at the time not recognize this fantastic advancement as one of the most profound technological stepping stones as the proverbial needle in the haystack?

Because IBM was the computer industry. They were just a little too old, a little too seasoned to see past what they already knew and embrace the change that was happening within their cherished industry. They were so blinded by their idea of what computers were and where they thought were going, that they failed to see the brilliance and significance of what then seemed like a drop in the bucket.

Now you see where I’m going with this, don’t you?

Credit Unions as an industry, well, were really pretty young, just as IBM was a fairly young company when the rise of the personal computer took the world by storm. But have we aged too much? Have we become too old, too seasoned, to take advantage of what is before us because we know what is best, and we see the future of the industry? We’ve been doing it for years and have been very successful at it! So what happens when things change? Needs change, technology changes, everything and everyone around us will change. Will we?

Will Google wallet or PayPal “out-bank” us? Will they be the young, innovative genius behind the personal computer of the Credit Union’s IBM phase?

Is the next great leader out there, but we are ignoring them because we know what is best and they are too young or too ignorant to truly understand the real trials and tribulations of the industry?

I am in no means saying that Credit Unions are destined to fail. I simply mean to question whether or not we would know what the next move was if it was staring us in the face. Or maybe, we would simply swat it away, like a bug buzzing around our head. We may be too seasoned to hear this bug for the butterfly it truly is.

I don’t have the answers to these questions, but I find it very interesting how much these two stories, from very different industries, seem to connect to one another. Maybe the answer to our problems is found outside of the industry, or maybe not. Maybe it already exists and we’ve yet to capitalize on the idea. There are a lot of what if’s and not very many definite answers, but one thing I am very sure of, is that we are upon the dawn of our own “personal computer” era.

My hope for Credit Unions is that they thrive. I hope there is an answer to all its ailments and this unrest in merely a blip in our long, and successful journey. I also hope Credit Unions can be as forward thinking in the future as they were in the past. We’ve come so far on innovation; we’ve helped so many by being innovative, why stop when we think we’ve found somewhere comfortable to rest.

Most importantly, I hope to help make sure we ARE the future of the financial industry, rather than just a stepping stone to greater one; the personal computer of the financial industry.