PREMIUM – Millennials have Venmo, banks have Zelle, but what’s the P2P payments preference for credit unions?

It’s not that credit unions cannot connect to the bank-backed (and bank-owned) payments system that is Zelle. In fact, credit unions like America First Credit Union and Mountain America Federal Credit Union are already connected to Zelle’s platform.

But the question many credit unions are contemplating is whether a P2P system is something their customers even want to have.

“The technology is there to provide the service,” Rob Maretsky, VP of digital services at Partners Federal Credit Union, the credit union of Walt Disney Co. employees, explained to Bank Innovation. “The more important question is — do our members want that service?”

In many cases, the member might want the service, but it is not a top demand, and therefore not a top priority for the credit union’s innovation team.

Credit union customers are, after all, different than banking customers. For starters, they are referred to as members. The credit union is a not-for-profit organization that pays its members part of its earnings in the form of higher savings rates and lower loan rates.

From a technology point of view, it’s not hard to provide a P2P capability like Zelle, Maretsky said. All that is required from a technology standpoint is accessing a gateway that allows the credit union’s system to connect to a payments platform. This gateway is typically provided to credit unions by their core processors. In Partners FCU’s case, that processor is Jack Henry.

For Partners FCU, a P2P feature is in its plans, but it is not the current focus. Right now, Partners’ top priority, dictated by customer demand, includes things like enabling digital redemption or couponing features related to Disney’s cards or Partners Perks program, as well as features like its digital deposits. Chris Parker, COO at Partners told Bank Innovation that 50% of all its check deposits come through the mobile app. The mobile app has over 56K active members, Parker said.

Another area that takes precedence over P2P is digitalizing the credit union’s switch kits. Switch kits, Parker explained is when a customer switches banks or FIs. Partners is exploring the possibility of automating that process, so its members can switch seamlessly between multiple accounts at different banks or CUs.

Nevertheless, credit unions need to be aware of developments in the payments space, Jason Osterhage, senior vice president of lending for the Chicago-based Alliant Credit Union, told Bank Innovation.

“The current version of our mobile app doesn’t have P2P functionality. It is on our product roadmap, however,” Osterhage said. “We’re considering Zelle and other possible integration partners. No final decisions there.”

Currently, only a handful of credit unions are integrated on Zelle’s platform. Aside from the previously mentioned America First and Mountain America, the others include Navy Federal Credit Union, Star One Credit Union, and Suncoast Credit Union.

In an email to Bank Innovation, Rebecca Acevedo, director of communications at Zelle, stated:

Zelle  works with four large processors to reach as many credit unions and smaller FIs as possible. We have partnerships with FIS, Fiserv, CO-OP and Jack Henry. We also work with numerous Technical Integrators to support the on-boarding efforts, including IBM, ACI, DB, and CGI.  We work with big and small banks. Through partnerships with Regional Payment Authorities (RPA), we strive to reach and educate regional banks and credit unions across the U.S.