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While the October 1 EMV liability shift deadline is approaching, "opportunities are being built around creating revenue for credit unions, competing in the marketplace, and bringing added value to members," said Madeline Aufseeser, a senior analyst with the consulting group, Aite Group.
Speaking to your League's Payment Systems Transformation Task Force last week, Aufsesser, who analyzes prepaid, credit and debit card issuing, marketing and processing, as well as loyalty marketing and incentives, said, "Payments are cool now! There's excitement happening in the industry, since the introduction of Apple Pay, and now Android Pay and Samsung Pay. This dynamic presents an opportunity for credit unions to shine."
Aufsesser has 25 years of experience in business strategy in the financial services and payments industry and has been extensively quoted in the mainstream press, including CNN Money and The Wall Street Journal. She told the task force, organized by Synergent, that credit unions have many competitive advantages today; they have been recognized for their strong adoption of mobile and looking out for their members.
This task force is one way that Synergent is making sure credit unions are well positioned for the future, according to John Murphy, who serves as President/CEO of the Maine Credit Union League and Synergent. To support credit unions in the transformation of the payments industry, Synergent has partnered with Aite. "We have this partnership and task force to help credit unions look to the future and to make sure we're on the right track," said Murphy.
Payments are a $290 billion business. In a recent report from Filene, most credit unions report generating more than 50% of their non-interest income from payments. Credit unions rank payments in the top five strategic priorities for 2015 and 2016.
Aufsesser said 41% of debit cards will be EMV-ready by the end of 2015, and most of largest merchants will also be ready for EMV this year. "Educating members on how to leverage the new technologies while protecting themselves against fraud is a valuable service credit unions can provide to members and to keep your institution top of mind, as competition increases for top of wallet," she added.
Task force member Ken Stockford, VP of Finance, CFO with Five County CU, said being proactive with member education about EMV chip cards helped reduce questions as they rolled out the new cards to their membership. "Our rollout was smooth with a Q&A on an insert, in our newsletter and on our website. Members felt more comfortable using their new card by having answers to the most asked questions ahead of time." The member education materials were created by Synergent Direct Marketing Services.
The task force members discussed the momentum on payments. From their feedback, Synergent Payment Services is investigating pre-paid card, rewards and card data programs to increase loyalty, card program usage, transaction volume and future non-interest income for credit unions.
For more information about EMV, credit unions may register, via the League Event Calendar, for "EMV Liability Shift: Things to Think About" webinar on Thursday, September 24, starting at 10:00 a.m.
Resources:
EMV Chip Card Video
Apple Pay Top of Wallet Video