How building societies & credit unions can future-proof with smarter payments

Building societies and credit unions are like well-built train stations on ageing track systems. Their mission is clear, their local community role is vital, but without modern rails and digital signals, the journey grinds to a halt. 

Legacy systems are already holding global banks back from keeping pace with digital-first rivals. And for their smaller mutual counterparts, the constraints are even greater.

Where legacy tech holds lending back 

Operating as financial cooperatives, credit unions, building societies and other mutual entities have long played a vital role in financial inclusion – often offering more affordable financial products than those available from traditional banks. With around 390 credit unions registered with the Bank of England - and over 2,000 across Europe - they provide services such as capacity-based lending, transactional banking, insurance and money advice.

Many were set up to support their communities – helping people to save, borrow and build. But today’s members expect more: instant access, flexible services, and fast, digital-first interactions. That’s where friction begins.

The biggest blocker? Legacy infrastructure.

Much of the tech stack underpinning lending, payments, and core banking systems in these institutions dates back decades. This…

• Creates bottlenecks around real-time settlements;
• Limits the ability to offer innovative payment methods;
• And makes it hard to compete with nimble fintechs.

Operationally, this means higher costs and lower agility. Strategically, it means missed opportunities – both in terms of lending innovation and acquiring new members. Even when the will to modernise is there, limited budgets and complex integrations often delay progress. This inflexibility hampers both maximising the clients you do have, reducing their stickiness, as well as keeping cost of acquisition with new clients high.

But there’s another risk: being left behind in regulatory resilience. 

As scrutiny increases around real-time fraud prevention, operational continuity, and cross-border payments, mutuals must modernise – not just to grow, but to stay compliant and competitive.

How credit unions and building societies can stay relevant

To remain relevant, mutuals must move beyond simply digitising old processes. They need to think like fintechs – modular, fast, and adaptable. That starts with payments. But there is a choice: Do you build, buy or partner? Should the latter option be chosen, it can provide the flexibility to fit your business and customer needs with minimal disruption.

Payments are often overlooked in digital transformation plans, but they hold the key to unlocking better lending journeys, deeper member engagement, and smarter data use. Offering real-time disbursements, digital card issuing, and embedded repayments can help transform the lending experience – especially for younger members used to seamless, app-based services.

First, building societies need access to a platform that lets them issue and acquire without overhauling everything. A modular payments technology solution, one that supports both issuing (cards, virtual cards, lending rails) and acquiring (merchant payments, SoftPOS, online checkout), allows institutions to build gradually, based on need.

Next, they need better visibility and control. With smarter APIs and data feeds, credit unions can track how funds are moving in and out – from loan disbursement to repayments – and spot risks earlier. Real-time risk monitoring and 3DS tools also ensure compliance with PSD2 and local fraud guidelines.

Finally, they need support with go-to-market strategy. Launching new payment products isn’t just a tech job – it’s about member education, integration with legacy systems, and ongoing support. This is where the right technology partner makes the difference.

How to tap into innovation, flexibility and control

It’s no longer enough to focus only on loans and deposits. Members of credit unions and building societies want services that mirror their daily lives – fast, mobile, and flexible. That’s why we’re focused on helping mutuals think like fintechs, but with the support and risk frameworks they trust.

With demand growing for real-time disbursement, virtual card issuance, and localised acquiring, we believe the future of community finance is modular, data-rich and digitally fluent.

At Tribe Payments, we’ve built a hyper-flexible and configurable platform that supports both issuing and acquiring – giving mutuals full control over how they evolve. Whether you want to launch a branded debit card, embed a loan disbursement system, or enable in-branch mobile payments with SoftPOS, we make it modular and manageable. Furthermore, Tribe’s real-time Risk Monitor with integrated PEP and sanction screening offers reliable security to banking payments, given the rise in both risks and regulations.

Our APIs are developer-friendly, meaning they plug into your existing systems without major upheaval. But more importantly, our team understands how to support institutions transitioning from legacy tech, and we partner with your teams to scope, test and scale gradually.

Looking ahead: Mutuals and credit unions at a crossroads

If building societies and credit unions embrace payments innovation – and treat payments as a growth lever rather than a back-office function – then they can unlock new value for members and drive deeper engagement.

Imagine a member taking out a home improvement loan, receiving the funds in seconds to a virtual card, then using that card to pay approved contractors via tap-to-pay or in-app payments. The repayment plan is embedded in the card usage, with automated reminders and instant notifications. All within a trusted mutual framework.

This isn’t speculative. These models are already being adopted in Asia and parts of Europe, where smaller institutions are leapfrogging larger banks with agile platforms. In the UK, the appetite is there – but what’s needed is the right mix of tools, support and vision.

The question is no longer “if” mutuals should modernise – it’s how quickly they can do it without losing what makes them special. Technology adoption doesn’t mean abandoning heritage. It means strengthening it. By choosing modular platforms, prioritising member experience, and adopting smart issuing and acquiring tools, credit unions and building societies can protect their legacy while preparing for a digital future.

With the right technology partner, mutuals can move from single-line journeys to a multi-lane payments highway – fast, flexible, and future-proof. The destination? A member experience that works at the speed of life.