Credit unions must capitalize on consumer interest in emerging payments options.
While the world is collectively striving for a return to some semblance of normalcy, the COVID-19 pandemic continues to shape the U.S., its economy and consumers, as well as the global economic landscape. As consumers have grown more accustomed to change over the past year and a half, the economy continues to demonstrate its resilience—and the payments industry is no exception. PSCU’s 2021 Eye on Payments study set out to gauge payment preferences among credit union members and other financial institution customers (non-members), including how they evolved over the past 12 months.
More and more consumers are turning to mobile wallets, digital payments, and contactless cards or tap-and-go payments offerings to make purchases. Consumers are also indicating strong interest in such emerging payments and offerings as cryptocurrency and installment payments, or buy now, pay later.
Usage of mobile wallets, digital payments and contactless cards continues to increase. Respondents who reported using a mobile wallet in the past 60 days have increased 50% from 2019 to 2021, with 30% of those reporting they use a mobile wallet at least a few times per month. All generations surveyed report using their contactless card more now than they did before the pandemic, and 86% of respondents with a contactless card report using it at least a few times per year, as opposed to only 65% pre-pandemic. In addition, 57% of all respondents report using digital payment methods at least periodically, as opposed to 42% in 2019.
After increasing dramatically as a result of COVID-19, online shopping has now become routine. In fact, 91% of all survey respondents shop online at least a few times per month, and almost one in three shop online at least once a week or more.
Consumers are reporting strong interest in emerging payments and offerings such as cryptocurrency and installment payments or buy now, pay later. Overall, credit union members report they are generally more open to emerging payment methods than non-members. One in three overall respondents say they would be interested in learning more about cryptocurrency. For BNPL, of those who know their financial institution offers these services, 61% report they have used such a program.
Members expect their credit union to have robust digital payments offerings. Digital is now one of the first avenues members turn to when interacting with their trusted financial provider, leading to a heightened focus on usability for credit unions. Along with leveraging data to provide members with personalized experiences, credit unions should also be sure to incorporate these findings into their digital strategies. Partnering with a like-minded organization like a credit union service organization can ensure credit unions have access to the most updated research, cutting-edge technology, innovative products and services, and more.
With digital payments on the rise, more people shopping online and competitors fighting for their share of the market, it is no longer enough to simply encourage members to use their credit union-issued cards at the point of sale. Credit unions need to push for members to choose their credit union-issued card first across all channels, whether that be in mobile apps, online or in-store.
Lastly, credit unions should capitalize on the interest surrounding emerging payments offerings and trends. Ensure board members and employees are familiar with these new technologies and various use cases throughout the credit union space, as well as the risks they can bring. Then, educate members about how these new solutions and services work, what to expect and how they can incorporate these items into their financial lives.
SVP/Chief Marketing Officer Tom Pierce is responsible for leading and executing PSCU’s marketing and communications strategy. Pierce has successfully led marketing teams for more than 30 years, with the latter half of his career spent in the payments industry. Prior to joining PSCU, a CUESolutions provider, Pierce served as chief marketing officer for Cardtronics, a global ATM organization serving the retail and financial services industries, where he directed a global marketing team in the development and execution of strategic marketing and communications initiatives.