Paul Fiore's path from online banking vendor Digital Insight to credit union mobile payment venture CU Wallet included a stop in the film business, where he saw firsthand the tricky task of bringing modern technology to a legacy industry where cooperation is in short supply.
Fiore co-founded Digital Insight in 1995 (Digital Insight was later sold to Intuit) and has worked in a variety of financial services positions in his career. Fiore's now the CEO and founder of CU Wallet, a Los Angeles-based white label provider of digital wallet technology for credit unions that is banking on credit unions' non-combative culture to build a broad, collaborative and widely available mobile shopping and payments experience.
CU Wallet recently finished an integration with MasterCard to include MasterPass as part of the white labeled individual credit union mobile wallets built through CU Wallet’s shared services, a major addition that could bring the credit union venture to hundreds of thousand merchants.
The struggle to build collaborative mobile pay ventures — as evidenced by the recent collapse of the Merchant Customer Exchange's plans for its CurrentC wallet — reminds Fiore of his time in the film industry about 10 years ago, when he worked as a producer and actor.
"For consumers, going to the movies started from having to get movie times in the paper. Then you could [dial] Moviefone to get that information. Later still, you could go online to see times as well as trailers and info about the movie. But when it came to buying tickets, the chains didn't want to share the practice of selling seats," said Fiore.
Then the ticket-selling site Fandango came along and demonstrated how selling seats online can lower wait times at multiplexes — finally winning buy-in from stakeholders.
"Fandango pulled all of that together," Fiore said. "That's who the winner is. The venture that brings the elements together — searching, shopping and paying."
CU Wallet is in an industry that has many of the same problems as the film business—namely friction around payments that frustrates consumers and brick-and-mortar merchants; and an inability of different stakeholders to collaborate on a common model to incorporate mobile payments into a broader chain of commerce activities, Fiore said.
"This payment friction causes a high rate of abandonment," Fiore said, stressing seamless payments that don’t interrupt the consumer’s experience as the vital innovation. "The payment is the final piece of the puzzle that makes the entire experience easier."
CU Wallet is attempting to bolster interoperability by relying on the credit union industry's long tradition of sharing resources such as branches and back office service, as well as collaborating with other companies that provide access to a broad range of services that can be shared equally among CU Wallet's members.
This enables CU Wallet members to build wallets that have different brands, but all work the same way. “The underlying code is the same code, but it's easier to deploy and less expensive for the institution," Fiore said.
The venture's longstanding partnership with Paydiant powers contactless acceptance through NFC, Bluetooth beacons and QR Codes, digital records and offer redemption. Paydiant's parent, PayPal, also enables further opportunities for collaboration. CU Wallet has additionally partnered with retail mobile technology company Doublebeam, which has been acquired by Verifone; and the digital payment company CheckAlt.
CU Wallet’s MasterPass integration opens up a wide range of coverage—MasterPass is accepted in 29 countries and by 250,000 merchants—and the low navigation offered by the "pay with MasterPass" function for repeat purchases.
"Back in the 90s when Microsoft and Intuit were first building online banking on the front end, they asked banks to provide branding assets and data that could be used to build websites for the banks," Fiore said. "That is our vision. All of the various payment scenarios are supported, and the financial institution is the intermediary."
The partnerships have helped CU Wallet attract 120 credit unions with more than 10 million cardholders. While that's not the entire market, CU Wallet is growing quickly and credit unions are better positioned than other industries to collaborate on a mobile payments venture to lower costs and build scale.
"Credit unions are not competing with each other; they are serving a specific geography or an affiliation such as a profession or military service," said Andy Schmidt, an executive advisor at CEB. "That makes it easier to have a common approach."
Given that, credit unions are more likely to have an open wallet that can gather data on consumer trends to improve the product over time, Schmidt said. "And credit unions have a level of trust that a consumer may not have with a bank," he said.