Digital Transactions Authoritative, insightful and timely information for payments professionals
Co-Op Financial Services, a vendor and network provider to 3,500 credit unions serving 30 million debit card holders, is upgrading its Sprig mobile wallet with technology and services from the big processor Fidelity National Information Services Inc. (FIS) and its PayNet payment network. Sprig’s upgrade comes at a time when other major players in digital wallets, notably Google Inc., are reconfiguring their products in order to get more acceptance from hesitant consumers and merchants.
Sprig, first announced in January following a so-called soft launch last year, soon will offer out-of-network person-to-person payment capabilities to Co-Op member credit unions via FIS’s NYCE electronic funds transfer network. Future enhancements may include cardless ATM transactions through smart phones as well as a possible linkage to Merchant Customer Exchange (MCX), the nascent retailer-backed mobile-payments network.
“You’re going to see more and more from us, because we are revamping things,” says Lois Hansen, vice president of product development at Rancho Cucamonga, Calif.-based Co-Op. Hansen, a former payments consultant and executive with eFunds Corp., now a part of FIS, joined Co-Op only in October.
The upgrade includes a redesigned Web and mobile interface. A big reason for the changes, which also include the rebuilding of the middleware that helps power Sprig’s technology platform, is that they will enable Co-Op members to more easily extract and use data from what Hansen calls various “silos” that have limited communications in the past. “Many, many companies are struggling with these silos,” she says. Sprig, however, will continue to rely on much of its own technology and will not become a white-label mobile wallet built on Paydiant Inc.’s system that Jacksonville, Fla.-based FIS is offering to its financial-institution clients, according to Hansen.
Co-Op earlier this year indicated that Dwolla Inc., a Des Moines, Iowa-based payments startup, would be its provider of so-called good-funds availability for P2P payments, which are faster than automated clearing house payments. Now, FIS/PayNet through NYCE will be Co-Op’s main provider for that service, although Dwolla is still in the picture as a supporting player, according to Hansen. In fact, Co-Op plans to bring in even more providers, although Hansen would not identify any yet.
“We’re going to be looking at other partners, other access points. We won’t be limited to PayNet alone,” she says. “The whole thing within a P2P type of network is it’s chicken and egg. We don’t want to put all our eggs in one basket.”
So far, Sprig users can send and receive P2P payments only within the Co-Op network. Users will be able to originate payments to out-of-network consumers late in 2014’s first quarter and receive payments from out-of-network senders in the second quarter, Hansen says. Earlier plans had called for out-of-network capabilities to be in place by this past June; why that didn’t happen isn’t clear. “I’m not even sure why, because that was before my time,” Hansen says.
About 300 credit union’s participated in Sprig’s trial run in 2012 and their members generated nearly 1 million transactions. Updated figures were not immediately available.
Hansen won’t reveal details about possible future enhancements, although she says to “stay tuned.” Co-Op expects to add functionality next year that will enable Sprig users to make ATM transactions with just their mobile phones and without a debit card. And she says Co-Op has had communications with MCX, which is using FIS as its processor, although she won’t say if or when any deal is pending.
Sprig had already offered remote deposit capture via Apple Inc.’s iPhone, and the new upgrade will extend remote capture to mobile devices running on Google’s market-leading Android operating system.
Co-Op announced Sprig’s upgrade less than two weeks after Google tweaked its struggling Google Wallet yet again, this time with a plastic card that lets users make point-of-sale transactions wherever MasterCard cards are accepted. Mobile-wallet developers have encountered headwinds that include operational issues as well as merchant and consumer resistance to new payment forms.
Hansen, however, is confident that Sprig will be a winner “because of the allegiance of our members. We have a built-in consortium and we are a trusted vendor to those credit unions. If Co-Op endorses it, those credit unions view it as safe.”
