America First Credit Union, which has about 743,700 members, offers a mobile app service called Card Guard that allows its customers to turn on and off their credit cards based on parameters they set.
For example, if a transaction is made outside of a consumer’s home state, she can choose for the retailer to reject that transaction, says Brice Mindrum, mobile services manager at America First Credit Union. Or she can instruct merchants to decline all transactions above $500. If a consumer loses her card, she can also turn off all of the card’s functionality until she informs America First Credit about the problem.
Consumers can modify the parameters at any time. A customer can also program the app to send her a smartphone alert so that whenever a transaction clears, she receives a notification on her smartphone. The vast majority of consumers who use Card Guard have enabled smartphone alerts, Mindrum says.
Card Guard is app-based, so consumers must have the Card Guard app and the America First Credit Union app to use its features. The Card Guard app is based on the CardControl technology from Ondot Systems.
Since Card Guard’s launch in April 2015, 15% of the America First Credit Union’s mobile bankers have used the CardGuard system, Mindrum, who is happy with the results, says. “Adoption so far has exceeded our goals that we had for the year,” he says.
Mindrum defines mobile bankers as consumers who have used their mobile device to bank with America First Credit Union within the past 90 days. This is about 40% of the credit union’s total customers, he says.
To get the Card Guard app, a customer taps on a Card Guard button within America First Credit Union’s mobile banking app and is taken to Google Play or the Apple App Store to download the Card Guard app. Once she opens the Card Guard app she creates a Card Guard account and the two apps are then linked, Mindrum says.
Mindrum likened this credit-card controlling technology to when financial services institutions first rolled out the feature that allows consumers to deposit checks by taking a picture with their smartphone. Mindrum says America First Credit Union only added the feature after several other financial institutions had. Now, many consumers, especially young consumers, Mindrum says, expect mobile deposit capabilities from their financial institutions.
“We realize we didn’t want to be in the middle again, we wanted to be a forefront of innovation going forward,” he says.
“I think [Card Guard] is the mobile deposit of now. I think you are going to see financial institutions clamor for this type of this service,” Mindrum adds.
Besides providing an added service for its customers, having an on-off feature can also prevent fraudulent charges, Mindrum says. For example, if a consumer has notifications turned on in the Card Guard app, and she gets a notification of a $400 purchase that she did not make, she can turn the card off to reject further transactions and then notify America First Credit Union. So far, the credit union only has anecdotal evidence that Card Guard has helped stop unauthorized purchases, Mindrum says.
The credit union rolled out Card Guard to the public in April 2015 after piloting the app for a few months. The Card Guard app took about 14 months to develop with Ondot, and more than 10 of America First Credit Union’s departments were involved in the development, Mindrum says. If the credit union was aggressive about completing the project, the app could have been ready in eight months, he says. However, after catching a coding error early on, America First tested the app carefully before releasing it to the public. Mindrum declined to say how much the new app cost.
While America First Credit Union customers have to create another account within the Card Guard app to use its features, the credit union wants to soon eliminate that added step. The financial institution is also looking to add more types of push notifications, such as ones about where the consumer typically shops.
America First Credit Union is letting its customer know about the program through signs in its locations, ads within its own mobile banking app, as well as TV ads, radio ads and billboards.