As digital financial products continue to evolve, many credit unions have struggled to keep up. To help address this issue, Catalyst, in partnership with Neural Payments, has developed a peer-to-peer (P2P) solution that integrates with credit unions’ mobile apps.
This functionality may draw comparisons to Zelle, which allows customers of major financial institutions to send near-real-time P2P payments. Like Catalyst’s platform, Zelle operates solely within banks’ mobile apps, after the network discontinued its standalone app last year.
One common drawback of P2P apps is that recipients must have an account on the platform to receive funds. However, the Catalyst and Neural Payments solution is vendor-agnostic, allowing credit union members to send payments to anyone with a mobile number or email address. Funds will move directly from the sender’s credit union account to the recipient’s preferred account.
Though P2P payments are the central focus, the solution will also integrate instant payments and image deposits.
Maintaining the Personal Touch
Digital payment solutions have been part of everyday operations for larger financial institutions for years. However, many credit unions have struggled to provide the digital solutions their members increasingly expect while maintaining the personal touch they are known for.
The lack of digital solutions has hindered some credit unions—many of which have aging memberships—from making inroads with younger customers. Functionalities like P2P payments are a must for Gen Z users, who are heavily engaged with fintech companies. Only 25% of Gen Z consumers said they don’t use platforms like Venmo or Cash App, according to Javelin Strategy & Research.
Doing Better with Small Businesses
While it may be challenging in many cases to draw younger consumers into the model, there is a strong opportunity for credit unions to expand their small business membership. Separate data from Javelin found that the percentage of businesses with any kind of relationship with a credit union increased from 6% to 9% last year.
That said, small business owners’ sentiment toward credit unions was positive, but one of their main concerns was the breadth of the institution’s digital banking services. This suggests that, regardless of the demographic credit unions target, they will likely need to leverage vendor platforms to deliver the digital solutions that are now expected by members.
