The definition of payments has evolved quite a bit within the past 10 and even five years.
Payments used to refer primarily to bill payments ― as in mortgages, credit cards, loans, and utility payments. There was a time not terribly long ago when online bill payment services were considered progressive.
Today, payments has evolved to mean so much more.
Moments In Payments
Payments are now often associated with specific moments. For example, I know you, I owe you for our lunch, and you want to be paid ― now. In other cases, you may need to make an immediate payment to ensure utility services are not cut off. A friend or family member may need money for an unexpected emergency, or roommates may need to split the rent. You may be a small merchant who needs to buy produce from a local farmer for patrons in your restaurant to enjoy that same evening. Or you may be employed to drive passengers around in your car, and you need your wages to be paid to you today, rather than waiting for a paycheck. These are today’s payments.
When it comes to these new moments in payments, there are efficiencies to be gained through quick and easy pay options. For example, companies can now send invoices and request payment with a simple pay button. Providers can potentially reduce collection activities because payment in the moment is becoming more commonplace. By using voice assistants like Alexa, the experience becomes even more turnkey. It is now about speed, the user experience, safety, and security ― all of which are at the core of enabling new payment solutions.
Explosion In IoT
An explosion around the Internet of Things is on the horizon. Connected devices will provide many new opportunities for payments. Payments partners will be extended in ways and areas we have not previously seen, such as car manufacturers introducing payment capabilities in their vehicles. We are already starting to see these types of partnerships forming:
- Mastercard has partnered with OnStar Go, enabling drivers to pay for items such as gas while in their cars
- Ford has partnered with Amazon to use Amazon while in-car, including the opportunity to order food from your vehicle
- Hyundai has partnered with Google to enable Google Home in their vehicles
- Jaguar and Shell have partnered to provide in-car capabilities with PayPal, Apple Pay, and Android Pay
Public transit will continue to expand with contactless payments as turnstiles become payment devices, enabling users to tap and pay as they go. And smart cities with new payment opportunities will emerge.
Card Networks And Credit Unions
We will see more companies enter the payments ecosystem who are not traditional players. Card networks will no doubt play a significant role in making these offerings available to cardholders, and credit union accounts will be the foundation for members to access these services.
Traditional bill payment services do still exist, but we will continue to see rapid change in payments in the coming years. Our job as an industry is to ensure the credit union card remains the card of choice by enabling the rich features and functionalities that command top-of-wallet for the member. This evolution represents an exciting time for credit unions everywhere through increased opportunities for adoption and growth.
Jeremiah Lotz directs PSCU’s initiatives to empower the company’s Member-Owner credit unions with innovative and engaging payment solutions. Jeremiah leads an experienced team dedicated to delivering PSCU’s credit, debit, prepaid, fraud, mobile banking, and online bill payment services. He also manages the strategic relationships PSCU forges with leading payments technology providers to ensure Member-Owners have access to world-class platforms and solutions that build profitability and loyalty.