EMV. Never before have three little letters caused so many headaches and furrowed brows among credit union executives.
But as the October liability transfer date approaches for the Europay, MasterCard, and Visa (EMV) card standard, we’ve learned one thing for sure: the more Americans (who were largely unaware of the topic barely six months ago) become familiar with EMV, the more they want it.
The national banks are largely on board already, and roughly 120 million Americans are currently carrying EMV cards. That number is expected to jump to 600 million people by year’s end, representing about 71% of credit cards and 41% of debit cards, according to the Smart Card Alliance.
The more members become familiar with EMV, the more crucial it will be to have it in place to keep your card top of wallet.
Segue back to those headaches and furrowed brows, right?
Fret not. We can learn from those who’ve already rolled out EMV successfully.
We can also sweeten the scenario with a new idea that can both help offset the cost of EMV and increase adoption: Launch a rewards program at the same time you issue a new EMV card.
This creates an enhanced story that magnifies the impact of each program. Your credit union can pack a seriously compelling message because both security and rewards are on the top of cardholders’ minds.
In fact, 88% of Americans say rewards are a top priority when choosing where to bank, The Wall Street Journal reports. That’s probably why nearly half of all financial institutions offer a debit reward program—a 50% lift in one year, according to the 2014 Debit Issuer Study commissioned by PULSE.
A simultaneous rollout helps solve one of the hardest parts of a rewards program: getting the enrollment.
Rewards programs are proven to drive more card transactions, more interchange revenue, and greater loyalty.
Cardholders enrolled in Buzz Points rewards, for example, swipe 65% more than the national average, driving $3 to $6 more interchange revenue per account per month, with a 45% lower churn rate.
By introducing rewards along with the new, secure chip card, you get more members making your card their primary form of payment.
Plus, you’ve added a big-time retention tool—with assured awareness thanks to the well-timed rollout—for those members who are already heavy debit card users.
Considering the expense of EMV rollout, the importance of increased card usage from rewards programs and the resulting noninterest income is magnified.
Even more good news: It’s easy to piggyback this approach on top of established strategies by, for example, rolling out EMV in phases to decrease resource constraints of an all-at-once approach.
In the first phase, include cardholders that are likely to be more thirsty for the new chip card than others, such as frequent foreign travelers (whose magnetic stripe cards are often useless) or recent victims of fraud.
This staged approach also allows you to smooth out any kinks in your process, and to test different rewards and security messaging to solidify around the strongest marketing for subsequent, larger phases.
Another tactic is to adopt EMV-ready instant-issue technology. Cardholders can start using the card right away and the personalization, combined with rewards, is more bait to make your card their primary payment source.
The key finding from a comprehensive study to EMV rollout in Canada concludes that “a positive initial customer experience with EMV was a critical success factor for the adoption of the technology.”
It’s hard to find a more positive experience than instant, free enrollment in an easy rewards program.