Want Growth? Debit, Meet Digital

November 9, 2016

Who loves debit? Who doesn’t? Debit usage is up because both consumers and merchants embrace it – consumers for its convenience and security versus checks, and merchants for lower interchange fees. Credit unions love debit too: It’s the basis for that all-important PFI relationship.

Yet, how do credit unions compete for debit usage – and win? Increasingly, the field of competition is digital:

  • M-commerce is rising. According to comScore, mobile retail sales are up 20 percent year over year. Mobile now accounts for 70 percent of time consumers spend on a retailer’s site and 20 percent of sales.
  • Mobile wallet use is up. Among those with an eligible phone, 27 percent have used Apple, Android or Samsung Pay, according to Auriemma Consulting Group’s Mobile Pay Tracker. Moreover, 39 percent would use mobile payments more if they were more widely accepted.
  • Mobile P2P is having a moment. 57 percent of respondents to Bank of America’s Trends in Consumer Mobility Report said they would or already do use a mobile-based money transfer service.
  • Money management is increasingly digital. The Bank of America study found that more than a third of mobile banking users check their app once a day or more. For 41 percent of users, frequent checking is a stress reducer.

Debit is a rising star in the world of mobile payments. In a recent summary report, Mobile Payments: Market Leadership Is Up for Grabs, Mercator Advisory Group found that, while credit was still preferred for use in mobile payments, debit was more often the most recently deployed type of card in a mobile payment app. As mobile commerce, mobile wallets and mobile transactions become more common, the mobile experience for debit becomes increasingly critical.

How Can Mobile/Digital Enhance Your Debit Portfolio?

The rise of digital/mobile is interesting, but how can it impact debit? It may be most helpful to look at this opportunity from a broad perspective: As commerce, payments and activity move to mobile channels, your debit portfolio must move as well. What are you doing to encourage this migration?

  • Package: Offer your channels together, so that members associate debit with digital.
  • Promote digital wallets and mobile payments along with your card products.
  • Leverage apps, such as CardNav, that help members manage their cash flow or watch for fraudulent activity. In the future, look for Cardless Cash – which enables ATM transactions to begin on a mobile device – to provide an enhanced digital experience to debit-related accounts.
  • Study cardholder usage. Know your data; know your membership. Then use what you know to send the right offer at the right time.
  • Be rewarding. A robust, digitally-driven rewards program differentiates your debit. Even better: Tie debit and credit products together to create relationship rewards (and make earning rewards easier).
  • Talk up security. Concerns over security are a top obstacle to mobile payments adoption, so be sure to emphasize your strengths – particularly where digital is concerned.
  • Be direct. Sometimes what’s old is new again. If you’re trying to boost debit usage, consider a direct mail campaign (preferably one that’s driven by analytics): They still work.
  • Make it easy. Across the spectrum, your member experience is better when it’s easier. Are your application processes seamless? Are your apps rich in features and simple to use? On a broader scale, the easier you make it to integrate digital and debit, the smoother the transition can be.

 

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