The credit union-driven CU Wallet is mindful that if it comes on too strong with its mobile-payment pitch, consumers will be turned off.

The initiative's early tests of its mobile wallet are on infrequent transactions such as ATM access rather than asking users to change everyday habits such as purchasing.

"We're baby-stepping the customers into it. After two or three transactions, that is where the comfort level starts to kick in," said Chris Otey, chief revenue officer of CU Wallet, which anticipates a formal rollout of its contactless mobile payment system by yearend.

CU Wallet is also expanding its member list. As of July 25 it has 69 credit unions covering 7.5 million consumers, with 15 of those companies added in July alone.

Before urging consumers to use the wallet app at the point of sale, CU Wallet is testing features such as cardless cash access at ATMs. Credit union members can "stage" a transaction on a smartphone, then go to an ATM to complete the transaction.

"Cardless cash access at ATMs is a good way to get people ready for mobile payments," Otey said. "Anything that gets people ready to use mobile devices more will be useful."

Consumers have a growing awareness of mobile and digital wallets, but a much smaller number actually use them. The most popular digital payment options are from PayPal and Google, which have had years to build an audience, according to recent research from Thrive Analytics.

Kinecta Federal Credit Union, a 250,000 member credit union that primarily serves Southern California and a member of CU Wallet, is focusing its attention on its existing mobile financial services such as mobile remote deposit capture, or using the smartphone's camera to take photos of checks for deposit.

"We're working on building use of the mobile platform that we have today," said Keith Sultemeier, president and CEO of Kinecta. The credit union also offers mobile bill payment, transfers and person-to-person payments.

The idea is to get people to use their smartphones daily to interact with the credit union as a precursor to using mobile phones as often as plastic cards.

"The consumer decides what level of interaction to have with the platform. Hopefully it's several times per day, but it's consumer-driven and member-centric," Sultemeier said. "We're not crowding their mailbox with information about new mobile technology."

CU Wallet was founded by Paul Fiore, the founder of the bank technology vendor Digital Insight, and Kirk Drake, the founder of Ongoing Operations, which provides continuity services for credit unions. In the past year CU Wallet has added a number of financial technology partners to power different parts of the mobile wallet.

Like the telco-driven Isis wallet and the merchant-operated Merchant Customer Exchange, CU Wallet hopes to create a network of similarly-focused organizations to enroll consumers in a mobile payment system. By not handing over the consumer relationship to a third party, CU Wallet participants retain control over the customer data the revenue from data-driven cross-sales and marketing.

"We'll enable the credit unions to automatically enroll members in the wallet, so the credit union's credit and debit cards will be at the top of the wallet," Otey said, adding each credit union participant in CU Wallet will govern the use of other credit cards, loyalty and gift cards linked to the wallet.

CU Wallet will support traditional credit union staples such as shared services and a local focus. "Buy local" loyalty campaigns will be a large part of its marketing push.

The initiative is also enabling most forms of mobile payment technology, including Near Field Communication, cloud-based systems and Bluetooth Low Energy beacons, Otey said. Most users will likely choose QR codes at first, he said. QR codes can be displayed on any phone's screen and read by scanners at the point of sale.

"Merchant adoption is a big piece of this effort, and QR codes are the lowest common denominator," Otey said. "The merchants don't need a wholesale swap-out of equipment."

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