Have you had “upgrading to contactless payment cards and other digital wallet services” on your wish list but haven’t made the move yet?
Put those at the top of your priority list, stat. Thanks to the coronavirus (COVID-19) pandemic, the industry has seen a seismic shift over the past six months in the way consumers pay.
What used to be “nice to have” features that would draw in younger members are now table stakes across the board, and those who haven’t upgraded yet are missing the boat in more ways than one.
Discover why it’s imperative to get in on the contactless card/digital payment trend now, and an easy trick for offsetting some or all of the costs of doing so.
“Contactless” is the name of the game right now and for the foreseeable future as people avoid germ-heavy cash and touching of payment terminals.
With contactless debit and credit cards, often referred to as “tap to pay,” no tapping is actually required—just a placement of the card within a few inches of the payment terminal.
The “digital wallet” (or “e-wallet”) is another type of contactless payment option. It refers to a mobile phone app or other service that stores payment information in the cloud so consumers can pay via their smart phone or wearable device.
The three biggest reasons your credit union should issue contactless cards and offer digital wallet services to members ASAP:
1. Consumer experience. People want a seamless, touch-free way to pay and get out of stores quickly. Contactless cards are up to 10 times faster than other payment methods, and 82% of people view contactless cards as a cleaner way to pay.
2. Safety and security. No-contact cards have an EMV-like security enhancement that lowers fraud.
3. Financial benefit. Given the speed, convenience, and security of contactless transactions, cardholders who adopt contactless payments increase their spending across the account. More transactions mean more interchange income for your credit union.
Most of the world is moving toward contactless payment methods, and at a pace highly accelerated with the arrival of COVID-19. According to a Mastercard global survey:
This all leads into the importance of your credit union being “top-of-wallet” for your members—their primary method for all or most transactions.
When you earn that coveted spot at the top, members use your card more and your credit union receives the interchange income from every transaction.
How much is on the line? In addition to in-person payments using contactless cards, U.S. consumers spent more money online in April and May of 2020 than in the past 12 Cyber Mondays combined.
When members reach for your card, that directly impacts your bottom line—at a time when you probably need it the most.
That position is up for grabs. Nearly one-third of Americans have switched their “top-of-wallet” card to one that is contactless-enabled, according to Mastercard.
Globally, 46% have done so, and among those under 35 years old, 52% have made the switch. Is your credit union ready to be “top-of-wallet?”
Non-interest income may be tight right now, but there’s an easy way to offset the costs of issuing contactless cards, and it requires surprisingly little work on your part.
We’ve been helping credit unions uncover staggering savings on their vendor contracts for more than a decade. With this depth of industry experience, we can quickly identify how much you could be saving and then negotiate the most competitive pricing and terms for you.
You might be in the perfect position to implement these services if:
Here are some examples of how credit unions have used the savings from recent contract negotiations to pay for upgrades.
To get the ball rolling on adding contactless payment options, start with a professional review of your service contracts to determine if there are any savings opportunities.
Adding these services will create stronger value to members and allow you to improve your bottom line.