Digital wallet key to future relevance
Adoption rates increased during pandemic as consumers sought safe, touchless payment options.
Adding a digital wallet to your convenience services is crucial to staying relevant, credit union technologists say.
“More consumers are asking for digital payment options as the concern for safety rises and the demand for touchless payments increases,” says Deb White-Rideout, executive vice president of $409 million asset University Credit Union in Orono, Maine. "If your credit union doesn’t have or doesn’t promote the use of digital wallets as a form of payment, then you are behind the eight ball."
Young people who are embarking on their financial journey do so on their phones, says Tom Church-Adams, senior vice president, pay products, for CO-OP Financial Services, a CUNA associate business member at the elite level. “A digital wallet is a huge opportunity for credit unions to stay relevant.”
Digital payments can make a credit union’s payment card top-of-wallet, says Melissa Thomas, senior vice president, operations and payments, for $11 billion asset VyStar Credit Union in Jacksonville, Fla.
“Credit unions should provide their members the benefits of the convenience and security that digital payments offer,” she says.
VyStar was an early adopter and has offered its members a digital wallet since 2014. During July 2021, the credit union processed more than $9 million on its debit cards through digital wallets, Thomas says.
University Credit Union has offered a digital wallet since 2016.
‘More consumers are asking for digital payment options as the concern for safety rises and the demand for touchless payments increases.’
Deb White-Rideout
“We are always researching new service offerings that can provide members convenient ways to gain access to their money, so why not give them an easy way to pay?” says White-Rideout.
Digital wallets allow members to load their payment card information onto their phones and make purchases without having their card or cash, White-Rideout says. It’s also a secure way to make purchases because it is locked and requires a personal identification number or biometrics, such as a thumb or facial scan, to use.
Member adoption has picked up during the pandemic, White-Rideout says, as more members turn to digital services.
One challenge, however, is that not all merchants have updated their systems to accept digital payments, causing some frustration for members who don’t carry their cards. As more merchants gain the capacity to accept digital payments and as the technology becomes more available worldwide, White-Rideout believes there will be a similar increase in adoption rates.
To improve member adoption rates, Church-Adams suggests ensuring all credit union management, staff, and board and committee members understand how to use a digital wallet so they can answer questions and share the benefits with members. Tying the use of the card to a rewards program also has been successful.
“Digital wallets will help credit unions keep their cards top-of-wallet and attract a younger membership, which will no doubt lead to portfolio and transactional growth,” Church-Adams says.
