Implementing a new technology is never completely stress free, but credit unions are finding that Apple Pay rolls out easier than most.
Credit Union Journal spoke to four early adopters of this new mobile wallet technology. Here's what they had to say:
Idaho Central CU was the first CO-OP Financial Services client to go live on Apple Pay. The $1.8 billion Chubbuck-based institution has 550 employees serving more than 185,000 members served through 25 locations in Idaho.
ICCU's Operations Card Services Manager Mason Oswald said as soon as Apple Pay was announced, members started asking about it.
"We felt it was an easy decision to sign up for Apple Pay," Oswald said. "We were one of the first in the credit union world to be a part of it, which sets us apart."
Idaho Central CU signed with Apple on Oct. 3, 2014, and went live Dec. 16, so the process took approximately two-and-a-half months. Oswald described CO-OP, which is based in Rancho Cucamonga, Calif., as "excellent" to work with. (For more on how CO-OP executives say momentum is "building" for Apple Pay — both on the credit union as well as the consumer and merchant sides — see related story here.)
"From an implementation standpoint it was pretty easy, in part because CO-OP helped so much," he said. "All of our cards are Visa branded so we are on the Visa platform for Apple Pay. Visa also was very good to work with.
Since going live all member feedback has been "very positive," according to Oswald, who said the member experience has been so "very easy" that the CU has not had to field many questions. "If we do get a call it is just to verify their identity. We get them authenticated and they are ready to go."
As of Jan. 14, ICCU was approaching 1,600 tokens provisioned on its platform. Oswald said usage is growing on a daily basis and he expects it will continue to grow as members acquire the new iPhone 6.
"We started promoting Apple Pay with a press release, which had a great response. We e-mailed every one of our members to let them know Apple Pay was available, and we have a landing page on our website to answer any questions."
Asked if ICCU wished anything was different about Apple Pay, Oswald said no.
"Everything has been really smooth. As the first with CO-OP it was an excellent opportunity to work with them. I was extremely pleased with the whole process. All parties were excellent to work with."
Security Service FCU
Jay Winslow, EVP and chief information officer for $8.1 billion Security Service FCU in San Antonio, said his institution "wants to be where our members want us to be," adding, "they are looking for increased levels of convenience."
"More and more, that means mobile payments," Winslow said. "We want to make our members' financial lives simpler and better. When Apple announced Apple Pay we were all over it. We quickly began to make phone calls and signed with Apple at the end of October."
Because SSFCU has a strong relationship with MasterCard, the CU was given additional aid, including a project manager to expedite it through the process, according to Winslow. The first pilot programs began in late December, and as soon as the CU's card processors were ready to support it, Apple Pay was released to members on Jan. 6.
Security Service FCU does a number of large-scale, complex initiatives every year, said Winslow, "so in that regard implementing Apple Pay was not the simplest thing in the world but it was not the hardest, either. Our biggest challenge was one of our dual-routing partners had not already certified with Apple Pay. Credit unions should make sure their debit/credit card processors have already certified. We were at the forefront of the movement so we had to feel some of the pain. Others who do this later will find it easier."
SSFCU has "not really pushed" the availability of Apple Pay to its members, Winslow reported, other than some mentions on social media and a general e-mail. Still, more than 1,700 members signed up in the first week.
"The members were waiting for it," he said. "We have not heard that they love it, but we have not heard any complaints, either. The early signs are very promising, and we expect adoption to ramp up going forward."
Winslow said the overall success of Apple Pay depends on Apple getting merchants to sign up to accept it as a payment source. "For it to bring value to members' lives it has to be ubiquitous. I look forward in the coming months for merchants to get on board."
The implementation "will be nothing but easier going forward," Winslow predicted. "We like to be innovative, so some difficulties come with the territory. When we started in the process the dates for implementation were wide open. As more credit unions get involved they will have to work closely with Apple as the company is only going to support certain launch dates."
Mike Terzian, chief marketing officer for $1.2 billion Partners FCU, which serves employees of the Walt Disney Co. in California and Florida, said though most credit unions do not have the resources as a giant bank, providing mobile banking to their members "is not an option."
"And offering Apple pay is an extension," Terzian said. "If they do not engage and allow their cards to be enrolled, credit unions will be squeezed. In the next few years fewer people will be carrying plastic cards. So it is best to take steps to keep our cards top of wallet."
Getting set up on Apple Pay was "pretty fast," Terzian said, adding, "but it depends on the culture of the institution." He noted there is some education involved, especially with the tokenization component that is driven by Visa and MasterCard.
"Our processor is The Members Group. It took about seven weeks for everything to come together. Some weeks we were on the phone constantly," he recalled.
As of Jan. 14 Partners was in week two of a soft rollout. Terzian said management wanted to see how many early adopters would begin using Apple Pay without the CU pushing it.
"Right now members have to stumble upon it, or some are super fans of Apple and see our name on lists — and we still are seeing 20 to 30 sign up per day," he reported. "We have not done a ton of transactions, but we think our volume is pretty good."
Overall the experience has been "positive," according to Terzian. When the CU placed a brief "coming soon" tease on social media in November it drew a large of comments. "Disney was highly promoted as one of the merchants that was going to use it, and we wanted to be an early adopter. There is a ton of interest, but the avalanche is coming later as more people upgrade to the iPhone 6."
Asked if there was anything Partners FCU wished was different about Apple Pay, Terzian said as an early adopter there was a lot more excitement about it than ways to use it. "Apple is a phenomenal company and a phenomenal marketer. The marketing almost was too good because it raised expectations too high," he said.
Royce Ngiam, Partners FCU's AVP of marketing, added, "We do not process our cards directly, we use an intermediary, so there were extra steps with our processor. We could not just flip a switch and have it work."
Going forward, Terzian anticipates there will be more NFC terminals coming online.
"The more merchants that take Apple Pay, the more usage we will see," he said. "It is a bit 'Wild Wild West' right now. But no matter what, credit unions have to be able to say 'and' — as in, 'Yes we accept that and we accept that and we accept that one too.' With Apple Pay the consumer designates a default card, and the only way to be part of the consumer's virtual wallet is to make sure your credit union's cards can be enrolled.
Mountain America CU
Tony Rasmussen, SVP of payments and business services for $4 billion Mountain America CU, West Jordan, Utah, said the decision to sign up for Apple Pay was an easy one.
"It has been a strategy of ours for a long time to be an enabler," Rasmussen said. "We participate in a number of technologies that help our members, including Google Wallet, Isis/Softcard, Visa Checkout and other payment technologies."
It took Mountain America about three months from signing the agreement with Apple to going live with Apple Pay. Rasmussen noted MACU was "fairly early in the queue" so the project management side was changing as it went along.
"Visa managed the process, which I am hearing is not uncommon," he reported. "Most of the changes were good, but there were times it would have been nice to have a well-seasoned, tried-and-true approach. Until Apple said, 'Yes you can go,' there was always some question as to when our live date would be."
MACU's start date was Jan. 6. Rasmussen said management originally hoped to go live in December but some issues came up and the launch was pushed into early January.
"We would have loved to have been available for holiday shopping season, but it also is nice to have something new and exciting to talk about in January," he observed.
According to Rasmussen the project was "well-defined," as Apple told Mountain America what the CU needed to submit at the various stages of implementation. "From the first project call we knew what we needed to do. But once we gave all that information we could not find out when we would be live."
Part of the Apple Pay agreement is when credit unions reach a certain point in the set-up process they are allowed to post "coming soon" messages. Rasmussen said when MACU did so it drew "huge reaction" on the credit union's social media space.
"It generated a lot of good excitement and was the No. 1 topic trending," he recalled. "Once it went live members indicated they were very excited to have it."
That excitement translated into sign ups. In the first few days MACU registered more than 2,000 cards provisioned into the wallet. Rasmussen theorized that rapid growth was driven by the fact Utah has more NFC terminals than most other states.
"I can use Apple Pay at all three grocery stores where I shop, and both gas stations, whereas I have heard people in other parts of the country say they cannot use it yet," he said.
Rasmussen predicted the popularity of Apple Pay will lead to a "revitalization" of all mobile wallets.
"I don't think mobile payment will take over, but this could be a beginning of steady growth because there is some excitement," he assessed. "It will be interesting to see what the other companies do, and what Apple does, as well. The climate seems to be better for all the players."
The only element Rasmussen wished was different about Apple Pay? The fact the process seemed to take so long once Mountain America had submitted the required information.
"Visa let us know up front there were some steps that would be set by Apple. It was pretty easy overall, but the hardest part was the waiting."