At last week’s THINK Virtual Power Lunch, experts from CO-OP and Accenture dove deep into the current state of payments and how it may change over the coming months as a result of COVID-19.
The panel discussion shed light on a number of opportunities for credit unions, from rising consumer adoption of digital and contactless payments to top-of-wallet strategies within credit and debit.
A full recording of the “Navigating COVID-19 Payments Trends” webinar is available for download here. Be on the lookout for more THINK Virtual Power Lunches happening throughout the rest of this year.
Here were five quick takeaways from the conversation:
Demand for Contactless Payments is Exploding
Contactless payments will be a huge area of growth for credit unions as more of their members begin using them. In fact, research has shown that nearly one third of Americans have begun using contactless payments for the first time. “My expectation is that [contactless] is here to stay,” said Bruce Dragt (CO-OP Chief Product Officer). “It has moved from kind of a novelty to a fact of life.”
Action: If you haven’t already, now is the time to invest in contactless cards, as more members look to them as a faster, safer payment method for POS transactions.
Look to Capture Top-of-Mobile Wallet
Mobile wallets are also finally seeing increased adoption during COVID-19 and, like contactless, this may be a lasting trend. While many credit unions already offer mobile wallet integration today, they must spend more time educating their members on how to use them if they want to win top-of-wallet status. “Consumers have a natural fear that they are not adding the card properly, or that it won’t work at the point of sale” said Deb Wieczorek (VP, Strategic Advisory & Portfolio Growth, CO-OP). “They do not want that embarrassment, which is why many choose not to use mobile wallets.”
Action: Promote your mobile wallet solutions to your members and provide them with tips for how to use them. Also, consider running merchant-specific promotions and offers that incentivize usage in order to gain top-of-wallet status.
Be Wary of Rising Fraud
As member payments have shifted to digital and contactless channels, fraudsters are adapting accordingly. “We are seeing a return back to some old-school or traditional types of fraud, like one-on-one phishing, trying to gather credentials,” said Casey Merolla (Managing Director, Accenture). At the same time, fraud scams are getting more sophisticated, particularly “on social media where there are scams involving charities.”
Action: Ensure your fraud mitigation systems are prepared for an increased in card-not-present fraud. Encourage your members to practice good data hygiene and to regularly monitor their accounts using card controls and alerts. Also, be sure to stay up on the latest fraud trends around the country by attending FraudBuzz, our monthly fraud webinar. (Register now for FraudBuzz on Thursday, June 17, at 11:00 a.m. PDT / 2:00 p.m. EDT.)
Trust is Your Most Important Currency
Member payments preferences may have shifted suddenly and dramatically during this time; but what members want from credit unions has not: trust.
Credit unions can continue to drive trust and loyalty by ensuring their products and services meet members’ daily financial needs, particularly for their most vulnerable members. “Consider the flexibility factor when it comes to your credit and debit cards,” said Tom Church-Adams (SVP, Pay Products, CO-OP). “Different people are in different situations. So, do I want to push people into billing delinquency? Do I want to penalize my member right now? As you apply more flexible arrangements in this time, when you get back to the new normal, members are going to remember it – and they are going to stick with your card.”
Action: As members continue to navigate the uncertainties of COVID-19, credit unions should continue to provide calm and stability – either through cardholder programs that provide financial relief or with tools and lending products that help members improve their financial lives.
Credit Unions Think Full Recovery is Still 6 Months to 1 Year Away
A poll of the 350+ credit union professionals in attendance found that more than 75 percent believe that a full recovery from the effects of COVID-19 is still at least six months and quite possibly more than a year away.
Action: Be prepared for continued slow recovery in your payments and lending portfolio and use this opportunity to analyze your greatest opportunities for growth. One way to do that is by taking the Credit Union Strategic Investment Assessment before July 2nd in order to receive a customized strategic blueprint for growth at your credit union.