OnPoint Community Credit Union is using person-to-person payments as the foundation of building consumer comfort with mobile as a channel for money movement.
The $3.4 billion-asset credit union is adopting Fiserv's Popmoney system, which includes a mobile and online version. Popmoney allows consumers to direct funds to a recipient's mobile phone number, e-mail addresses or bank account number.
"We've had very little mobile payment capability, so this is our entry. The opportunity is there to allow members to move money to other members and non-members' accounts," says Jim Armstrong, senior vice president of technology and human resources for OnPoint.
In building a userbase for Popmoney, the credit union expects to ease adoption of more complex mobile technology, such as mobile wallets and contactless mobile payment systems.
"We don't want to be an innovator in mobile, but a fast follower, and it's just a matter of time before contactless payments takes off," Armstrong says.
The Portland, Ore.-based CU explored contactless payments several years ago via a 2009 deployment of Tyfone's u4ia platform, which integrates into core banking, bill payment and other systems to enable mobile transactions and account access.
The initiative included Near Field Communication technology, but credit union did not permanently deploy the technology, Armstrong says, citing demand at the time. "It was very early adoption, almost like breaking granite so to speak," he says.
The credit union recent underwent a broad technology project — a "tech reset," Armstrong calls it, which values a flexible technology structure to drive mobile payments and other transactions as the market develops.
At OnPoint, Popmoney is integrated with a suite of other mobile and Web banking products from Fiserv, all enabled from a single sign-on.
"I believe that if we hadn't made this a single sign-on, adoption would be limited if at all," Armstrong says. "Having a single point of entry eases confusion for the members and gives them the ability to move to whatever part of the site they would like."
P2P payments are sometimes panned as a mobile payments play by analysts — payments consultant Richard Crone estimates the retail point of sale market is about $6.2 trillion, compared to the $1.2 billion P2P market.
However, P2P can be a foundation upon which to build a mobile payments operation, says Erich Litch, division president of digital channels at Fiserv. The vendor added instant P2P payments to its mobile Popmoney product in the fall.
"There is a lot of focus on mobile payments at the point of sale, but there is also an opportunity for a diverse approach to mobile payments," Litch says. "There are still a lot of kinds of payments that people are making with checks and cash that can be migrated to mobile."
P2P technology can be particularly appealing to smaller financial institutions, says Phil Philliou, a payments consultant.
"P2P is an important first step for a credit union or community bank on the path towards offering more advanced capabilities such as mobile wallets, contactless payments, in-store rewards and geolocation based services," Philliou says.