CO-OP Financial Services is upgrading its Sprig digital wallet to allow broader person-to-person payments, and is also adding mobile credit and debit card control and alert features.
The new version of Sprig incorporates the PayNet technology developed by FIS, the same vendor supporting the Merchant Customer Exchange. With PayNet, members of the credit union-owned electronic funds transfer network and processor to make payments to accounts beyond CO-OP Connect the technology that allows CO-OP's shared branching and digital wallet programs.
"It drives you crazy when you have to write a check to someone. It could be at the hair salon or paying for dinner," says Caroline Willard, executive vice president of markets and strategy for CO-OP.
The Merchant Customer Exchange, a mobile payments initiative led by merchants, also uses FIS to power its payments technology. In a press release announcing the Sprig upgrade, Stan Hollen, CO-OP's president and CEO, said the FIS/MCX partnership "creates some interesting opportunities for CO-OP," though CO-OP would not comment further, and FIS and MCX did not return requests for comment.
"Credit unions are obviously smaller financial institutions, so by pooling their customer bases via a common wallet, they can create a collective consumer population that makes them more competitive with the larger financial institutions," says Rick Oglesby, a senior analyst with Aite. "It also will make them more attractive to MCX, which is looking to reduce the costs of payment acceptance by going direct to financial institutions."
Since FIS is also a common technology vendor between the wallets, it should make for an easy way to link MCX and participating credit unions together, Oglesby says.
"This could be the beginnings of MCX/FIS as a new digital payment network offering direct-to-FI payments outside of Visa and MasterCard schemes, but it still has to play out over time," he says.
CO-OP plans to make the new version of Sprig available in the first quarter of 2014, and will also add remote deposit capture for Android mobile devices (Sprig already supports mobile RDC for iPhones). The new Sprig will include a redesigned Web and mobile app user interface.
"The original wallet was mostly account aggregation, and we added transfers. That was all in network. It was closed-loop," Willard says.
Sprig by CO-OP is available to all credit unions on CO-OP Connect, with no implementation or base monthly fees for the digital wallet service. CO-OP plans to add more partners and features to Sprig through the year, and anticipates adding global mobile access, global ATM access through a digital wallet application, and point of sale capabilities.
CO-OP also plans to introduce mobile card controls and alerts by early next year. Members can set controls based on transaction type, merchant, location and payment thresholds. Merchant categories can also be limited, and business user can set controls for employees based on location and corporate rank.
"What's useful with controls is you are arguably the best person to know how you intend to use a card," Willard says. "You can set a cap on transactions, or if you see something you like at a store, you can change the parameters to make the purchase. If I change my mind about something, I can change the card on the fly."
CO-OP is introducing controls as payment providers such as U.S. Bank and MasterCard also increase controls for corporate card spending. The controls can also serve as a security measure, Willard says.
"This can be a tremendous fraud tool. If I know my card is never supposed to be used in a certain way, I can prevent that use," Willard says.