How to keep credit cards top of wallet during consumer spend shifts and uncertainty

The past year of economic change has impacted the ways in which credit union members interact with their credit union and transact on a daily basis – and research suggests these shifts may last well into the future.

In addition to determining what products and services to offer amidst changing consumer payment preferences, many credit unions have been faced with the challenge of how to keep their legacy card programs top of wallet over the last several months. Read on for four ways credit unions can position their credit card programs to remain top of wallet, even as members’ wants and needs continue to evolve as a result of the pandemic:

1. Promote clean purchasing options

According to PSCU’s 2020 Eye on Payments study, 70% of survey respondents reported they make decisions about how they will pay for something primarily based on which payment option is the most physically safe at the point of sale. With increased concern around physical contact in the pandemic environment, contactless cards and mobile wallets have an advantage over cash and even traditional EMV-chipped cards, given these options offer members a more sanitary way to make purchases and conduct transactions. Instead of viewing contactless cards and mobile wallets as competitors, credit unions should view both as vital options when it comes to share of wallet.

Also according to findings from Eye on Payments, the number of respondents who indicate they shop online at least a few times a week increased by almost 50% since the pandemic started, with the frequency of online purchases increasing among all age groups. This makes educating members about how to utilize their credit cards for card-not-present (CNP) purchases even more important. Credit unions should recommend that members have their credit union-issued card on file. The more ways members can pay – whether online, in-store, through an app or any other channel – the more likely they will choose to use or upload their credit union-issued card, securing the coveted top-of-wallet or top-of-card-on-file position.

2. Educate members about online and mobile offerings

When branches closed due to COVID-19, some members had to learn how to navigate digital banking online and through mobile apps for the first time ever. As branches reopen and members begin adjusting to a “new normal,” now is the perfect time to let them know what else they can do through these channels outside of just paying bills and checking balances. For example, how can they take advantage of different redemption options associated with their rewards credit card without going into a branch? How do they add their credit union-issued card to a mobile wallet so they can easily transact from their mobile phone?

Members that still get statements in the mail may not realize they have the option to receive eStatements instead, another method of going “contactless” for members that also represents a cost-saving opportunity for credit unions. In addition, eStatements allow members to check balances as needed, which might make them feel their funds are more secure and that they are more in control of their finances.

Communications and messaging should be as member-centric as possible. Members want to know their credit union is there to support them and their communities during these challenging times. Some credit unions are giving members the opportunity to “donate” points toward a charity of choice instead of trading them for travel or entertainment options that may not be applicable in the current environment. Credit unions should carefully consider their unique membership profile to ensure they are providing members with what they want and need, and then communicate these features and functions with members regularly and through all available channels.

3. Remind members about security features

During times of economic uncertainty, members are likely to monitor their funds more closely and also expect an elevated sense of security from their trusted banking partner. Communicating the availability of security features like alerts and controls and card lock, along with how to access them, will help instill a sense of confidence in members. 

Additionally, explaining the safety and security of newer offerings like contactless and mobile wallets is crucial. Of the Eye on Payments survey respondents who have a contactless card or mobile wallet but do not use it, many did not feel contactless cards or mobile wallets were secure (17% and 31%, respectively). There is a significant opportunity for credit unions to educate members on how to utilize alternative payment methods, as well as explain the benefits and security features of each.

4. Provide customized financial counsel

Members have been affected in varying degrees by the pandemic and will require different levels of financial advice and resources as a result. This could range from assistance with credit line management to simply directing members to online tutorials and educational materials. Credit unions that are able to provide customized support throughout the entire recovery progression are likely to earn members’ lasting loyalty and trust.

As the industry continues to grapple with the ongoing effects of COVID-19, credit unions should keep a pulse on their members’ behaviors and purchasing patterns. Promoting safer purchasing options, educating members about new payment offerings, and reminding them of available safety features will help keep their credit union-issued credit card top of mind and top of wallet.

Katie Kean

Katie Kean

Katie Kean is a principal director of credit consulting for Advisors Plus. Kean provides credit unions with the critical business intelligence needed to drive portfolio optimization and growth based on ... Web: Details