Companies in every industry have had to adapt to growing consumer expectations for financial interactions that are fast, easy, and secure. Experiences with online retail firms like Amazon have conditioned consumers to expect a seamless payment process where debit or credit cards can be used with the click of a button from any device—or even activated through voice commands. That retail experience has evolved into strong bill payment preferences that have influenced how consumers want to manage their loan payments.
Like any new trend or technology, organizations can find themselves in a position of trepidation, hesitant to adopt for fear of the unknown. However, taking an approach that is too cautious has risks of its own, causing financial institutions to lose ground on two critical fronts: customer satisfaction and operational efficiencies. Implementing debit card loan payments is the new frontier for many lenders, and for good reason. Debit is the payment option of choice for 171 million U.S. consumers, according to Simmons National Consumer Study (Fall 2017). Unfortunately, there’s a strong disconnect between what consumers want and what financial institutions offer, and consumers tend to vote with their feet by ditching institutions that don’t offer the convenience they crave.
How consumers benefit from debit cards
Both consumers and financial institutions benefit when lenders offer debit card payment options. Millennials, the largest generation at more than 75 million, have shown a definite preference for debit cards: only 50% have credit cards and 78% prefer using debit cards. Providing them with an easy, seamless bill-paying experience is an opportunity to build relationships with a cohort that has less entrenched loyalties to name brand financial institutions—and a long runway for financial service needs.
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