By the end of 2017, more than 50 million U.S. smartphone owners will have accessed NFC technology or another contactless payment platform. And in 2018, users of the technology will spend more than $1,900 during the calendar year tapping their smartphones at checkout.
“As a credit union, you simply need to make the leap into digital payments with the right strategy, and then keep pace with the technology,” said Jennifer Kerry, vice president, credit card services for CO-OP Financial Services. “This is an unforgiving market, and in order for your cards to stay ‘top of phone’ and top of mind, you must make every digital payment as seamless as possible for members.”
Here is what your credit union needs to know:
- To Members, “Card on File” Means “Set It and Forget It”
Kerry emphasizes that online and mobile commerce is on the rise, and that this has implications for payments.
“Credit unions should incentivize members to establish their card as the default payment option across merchant apps and websites,” she said. “Consumers typically only replace their default cards if there is an issue – which means if your card is not loaded into a member’s Starbucks app, you may never help buy that member a cup of coffee again.”
- Future Payments Will Be Increasingly Automated
According to Nathan Rogers, senior manager, product marketing for CO-OP, emerging in-store payment technologies are making it even more important for your cards to be “on file.”
“Imagine your members walking into an Amazon Go store, selecting their goods and leaving – without visiting a cashier or interacting with a terminal – and without giving one thought as to which card they placed on file,” he said. “That is where payments are headed.”
- Digital Wallets Are Going Mainstream
Rogers adds that now is the time to get involved with members and help them set up a digital wallet or two – with your card.
“Apple Pay is making strides with consumers, paving the way for more widespread use of digital wallets,” he said. “As with merchant-specific apps, once a preferred card is loaded into Apple Pay, it is likely to remain on ‘top of the phone’ indefinitely.”
- Fraud Will Damage Your Card Program – and So Will False Positives
Kerry notes that striking the right balance between member security and convenience is also key to success.
“Investing in advanced data analytics solutions and other fraud detection tools can ensure the highest level of fraud protection,” she said. “Consider also, though, that 40 percent of those who experience false declines abandon the declined card altogether. So, while you want to take all measures needed to prevent fraud, you also want members to have as much access to their accounts as possible.”
For a mildly suspicious transaction, she advises credit unions to consider approving it initially and then following up with an instant text message and email to the member to verify the payment’s legitimacy.
- There is No Substitute for a Superior Card Program
“In this ‘winner takes all’ environment, you need to make sure your card program handily beats the competition,” said Kerry. “This means offering a first-class rewards card and a low-rate option, and taking the time and initiative to proactively manage credit limits so your cardholders can continue to freely transact.”
She continued, “Remember that your service levels can make or break cardholder relationships as well. Invest in call center services to provide telephone support to members 24/7. And train your branch employees in all the new technologies your members are embracing. Just being there and available to assist members can turn their questions and issues into positive touchpoints that elevate both your cards and your brand in their eyes.”
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