By Rail Or Snail: Mixed Reports On Payments Progress

Fed calls for task force to study creating new, faster payments rails, while Fiserv survey finds mobile adoption accelerating on the fast track.

Two notable new reports about the payments rails made news in recent days, one about the train and the other about the passengers.

The former is the Fed’s long-awaited Strategies For Improving The U.S. Payments System. The latter is Fiserv’s seventh-annualHousehold Billing Survey.

The speed of payments in America’s financial services infrastructure has long been a source of concern. Another major stakeholder, NACHA, just released its own call to action, seeking proposals on implementing same-day ACH functionality.

The Fed report, meanwhile, calls for industry participants to get together on creating a new system, first by creating a taskforce. NACHA calls the Fed report a blueprint for change, but some call it more of the same.

We’ll get into this more in the year to come, but for now here’s an excellent rundown on the Fed move, or lack of movement, from It’s titled The Fed’s Slow March To Maybe Faster Payments.

The Fiserv biller survey, meanwhile, speaks on action actually underway for that leg of the payments journey between end user and financial institution.

The report is noteworthy for Fiserv’s oversize presence in credit union technology and the report’s own research cred. A third-party firm conducted it in May among 3,021 participants at least 21 years of age and representative of the U.S. population of online households. (Instead of among 25 executives who stopped at a trade show booth to fill out a questionnaire and enter the iPad raffle.)

The Fiserv biller report has become kind of an annual barometer for financial services providers and those of us who write about them. This year’s big takeaway: Consumers are coming to expect multiple billing and payment options from billers of all types and sizes.

Especially via mobile. The number of mobile bill payers grew 69% since the 2013 study, Fiserv says, and smartphone bill payers average two transactions a month that way.

Sixty percent of the respondents say being able to pay with a mobile device increases satisfaction with a biller (and by extrapolation, your credit union), and 75% say multiple options for making same-day payments also would strengthen their bond with said biller, bank, or credit union.

With today’s abundance of options to pay and receive bills, consumers increasingly value choice and choice leads to increased customer satisfaction, says a Fiserv blog on the report.

By Rail Or Snail

What this survey tells me is that mobile is quickly replacing PCs as a banking tool of choice, with paper a distant third place, says David Gibbard, a former core processor executive who’s now an Atlanta-based digital banking consultant and blogger.

He sees that trend only accelerating as members upgrade from small-screen smartphones to the larger-screen phablets now entering the market.

Gibbard adds that to keep up, tech-savvy credit unions will need to better serve tech-savvy members.

Members need a smart application that learns and manages their cash flow, spending and income that can automatically make payments based on predictive analysis and tends, he told

Steve Bugg, meanwhile, says the Fiserv report reaffirmed his belief that credit unions need to serve bill payers any way they choose to pay. He’s the chief marketing and member service officer at Heritage Federal Credit Union ($463M, Newburgh, IN) and says the number of bill pay users in his shop rose 38.4% from March to December after an online banking re-launch.

He also says more than 2,000 payments a month are now made through the credit union’s bill pay app. Our results have significantly outpaced our projections, another strong indicator that bill payment options are extremely important to our members, Bugg says.

And like Fiserv’s report, Bugg says it’s all about choices. For instance, he says Heritage has promoted Visa cards as an option for members who want to use that credit line to pay their bills.

Meanwhile, a new pay-by-phone option for members resulted in more than 640 payments for more than $300,000 in December. And other members still send bills in by mail or drop checks in the night deposit slots at the Indiana credit union’s branches.

As technology continues to expand and mobile payments become the accepted norm we need to continue to strategically focus on payment choices, Bugg says. But we can’t forget to continue to market all our solutions and options, whether they’re traditional or emerging.

January 29, 2015

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