We can liken the events of 2020 to a toddler or teenager’s tantrums. Like a widely dramatic mood swing, day to day we never knew what would come next. It taught us how to sit within uncertainty, how to cope with change, but most importantly – how to adapt.
The credit union industry adapted quickly to meet the immediate needs of our members – loan forgiveness, PPP loans, mortgage forbearance. We also saw a shift in how consumers spent money. Ecommerce quickly surpassed in-person spending and credit union priorities became clear: improving member experience by providing safe and uncomplicated digital payment options quickly jumped to the top of our list. From the start of the pandemic, we’ve seen two interesting payment trends because of changing consumer behavior.
Out of necessity, or ease of use, more and more people became comfortable with digital payment tools. Peer to peer payments (P2P) saw a rise in popularity; 70% of adults reported using P2P in 2020. With PayPal in the lead other P2P players like Venmo, Zelle, and Google Play all report roughly doubled usage since 2017. While the frequency of use has declined, likely because of the pandemic, adoption of the digital tool is increasing.
With a surge toward contactless payments, digital wallets like Apple Pay, Google Pay and Samsung Pay can help credit unions quickly transition to meet member’s needs to go digital. Because the transition from EMV for contactless cards is a slower process, encouraging members to use digital wallets is a great place to start. According to PaymentsJournal one significant trend is lower debit usage, with only 49% of consumers using debit in 2020; however, debit card volume is increasing. Encouraging members to load their credit union debit card into digital wallets can move the needle toward increased debit use.
For credit unions, these payments trends beg the question: can you afford to sit the digital transformation out? The answer is quite clearly, no. To remain relevant and capable of providing the digital consumer experience, and to appeal to the consumers need for safe, convenient digital payment options, credit unions must make strides toward offering a robust payment portfolio. Advance with LSC as your trusted partner as we navigate through the complex world of digital payments.