By: Tom Pierce, Chief Marketing Officer
Mobile wallets, contactless cards and choice – they represent three distinct, but interconnected trends when it comes to consumer payment preferences, and will no doubt serve as the fundamentals for credit union success in the immediate future.
Welcome to part III of our blog series on Eye on Payments 2019. This annual payment study by PSCU examines the factors that influence consumers when it comes to their choice and usage of different payment methods.
In our first blog from our 2019 study, we revealed that convenience and ease of use are now the main drivers behind a consumer’s choice in payment method, and in our second, we shared insights behind the newest payment preference for debit over credit. Today, we’re going to highlight three of the newest trends within the payments landscape, and share a few of the ways credit unions can keep pace with consumer demand.
Younger Generations Embrace Mobile Wallets
While mobile wallet adoption is on the rise, Gen Z and Millennials have the highest usage, based on our 2019 study. The reasons most survey respondents cite for not using a mobile wallet is a lack of understanding about what it is and how it works. The good news is that credit unions are in a prime position to educate consumers about mobile wallets, since they are generally seen as a trusted source for financial advice and guidance.
If a mobile wallet payment option is not a part of a credit union’s current suite of digital tools, it is essential – given growing consumer interest – that a plan be established to make this option a reality. Gone are the days when we can assign mobile wallets the label of “niche trend” for tech-savvy consumers; they are, in fact, now a key part of the future mix of payments.
Contactless Cards are Primed for Adoption
Despite the early stages of contactless card issuance by financial institutions, about one-fourth of respondents already have a contactless card and use it at least a few times per month. Of those that have and use a contactless card, convenience, ease/speed of use and security are the primary motivators for doing so, while the primary reason consumers do not use their contactless card is lack of acceptance at the stores they frequent. This situation presents another opportunity for credit unions to help educate consumers, as more people show interest in understanding contactless cards and discerning which merchants are contactless-enabled.
As with mobile wallets, it’s crucial that credit unions first ensure that contactless cards are an available option for their members. But the next step beyond a solid contactless card offer is readily available information about contactless via a credit union’s marketing channels (i.e., website, social media, ATM banner ads and even in-branch collateral). Credit unions will want to make it easy for members to obtain the information they need on contactless as a key to quick adoption.
Choice in Rewards
We all know the importance of rewards as they relate to debit and credit cards, but new information now shows that consumers value choice in rewards more than ever. While cash-back remains the most common reward offering, nearly six in 10 Eye on Payments study respondents report wanting other options (i.e., lower interest rates, waived annual fees or points for travel) to choose from. This was a common theme across all generations, showcasing to credit unions that flexibility is key to member engagement on the loyalty front.
Want to learn more? Download the full Eye on Payments 2019 study now! Explore the key takeaways that your credit union can leverage to effectively market to members and achieve enduring debit success.
In his role as SVP, Chief Marketing Officer, Tom Pierce is responsible for leading and executing PSCU’s marketing and communications strategy. Pierce has successfully led marketing teams for more than 30 years, with the latter half of his career spent in the payments industry. Prior to joining PSCU, Pierce served as Chief Marketing Officer for Cardtronics, a global ATM organization serving the retail and financial services industries, where he directed a global marketing team in the development and execution of strategic marketing and communications initiatives.