Five things your credit union needs to know about cards and mobile.
By Bill Prichard
According to statista.com, mobile payment revenue will top $1 trillion in 2019, up from $450 billion in 2015. Clearly, advances in mobile and digital tech are redefining payments. And the way members use your cards may never be the same.
Here are five things your credit union needs to know in the age of digital payments:
- To members, “card on file” means “set it and forget it.”
“Credit unions should incentivize members to establish their card as the default payment option across merchant apps and websites,” said Jennifer Kerry, VP/credit card services for CO-OP Financial Services. “Consumers typically only replace their default cards if there is an issue—which means if your card is not loaded into a member’s Starbucks app, you may never help buy that member a cup of coffee again.”
- Future payments will be increasingly automated.
Emerging in-store payment technologies are making it even more important for your cards to be “on file.” Imagine your members walking into an Amazon Go store, selecting their goods and leaving—without visiting a cashier or interacting with a terminal—and without giving one thought as to which card they placed on file. That is where payments are headed.
- Digital wallets are going mainstream.
Now is the time to get involved with members and help them set up a digital wallet or two—with your card. Apple Pay is making strides with consumers, paving the way for more widespread use of digital wallets. As with merchant-specific apps, once a preferred card is loaded into Apple Pay, it is likely to remain on “top of the phone” indefinitely.
- Fraud will damage your card program – and so will false positives.
Kerry notes that striking the right balance between member security and convenience is also key to success. “Investing in advanced data analytics solutions and other fraud detection tools can ensure the highest level of fraud protection,” she says. “Consider also, though, that 40 percent of those who experience false declines abandon the declined card altogether. So, while you want to take all measures needed to prevent fraud, you also want members to have as much access to their accounts as possible.”
- There is no substitute for a superior card program.
“In this ‘winner takes all’ environment, you need to make sure your card program handily beats the competition,” Kerry explains. “This means offering a first-class rewards card and a low-rate option, and taking the time and initiative to proactively manage credit limits so your cardholders can continue to freely transact.”
Bill Prichard is senior manager/public relations and corporate communications for CUES Supplier member CO-OP Financial Services, a Rancho Cucamonga, Calif.-based payments and financial technology CUSO serving credit unions.
CUES on CUSOs has featured a great deal of content about credit union service organizations throughout the month of April.