The events of the past year have made digital innovation a necessity for all financial institutions (FIs), but the stakes have never been higher for credit unions in particular. PYMNTS ‘most recent Innovation for Credit Union reading book, a collaboration with PSCU, found that nearly half of CU members are more interested in contactless payments now than they are. were when the pandemic started last year, and more than a third would be “a little”. “Very” or “extremely” likely to pass to a financial institution that offers these options. Another recent study reported that although members of credit unions are generally more satisfied with their FIs than customers of traditional banks, the inability to innovate is a sore point, cited by members as the most common reason for dissatisfaction with their CUs.
However, many CUs have not listened to their members when it comes to contactless payment innovations. PYMNTS research shows that contactless credit and debit cards are high on member wishlists, but only a third of CUs have invested in these innovations. Competition has also become increasingly fierce from FinTechs who introduce these options as the bank goes digital first. These findings highlighted the need for CUs to increase contactless innovation – or lose their members.
Caisse populaire d’Alliant, an 86-year-old Chicago-based CU with more than 600,000 members and $ 14 billion in assets, is answering the call. Sumeet GroverCU’s new digital manager told PYMNTS in a recent interview that Alliant values feedback from its members, using it to prioritize the features that matter most to them. Alliant has implemented several innovations as a result.
“Feedback from our members has helped us create a fantastic checking account backed by a contactless debit card, [an] award-winning mobile application and an intuitive online banking platform, ”he said.
Alliant’s contactless payment journey began a few years ago when it added support for Apple Pay, followed by Google Pay and Samsung Pay.
“During the pandemic, we saw a 50% year-over-year increase in the use of Apple Pay,” he said. “New members received new contactless debit cards, and existing members received [contactless] cards when their old cards expire or are lost or stolen.
Switch to contactless by 2022
Grover said contactless debit cards have resonated with members, who have gradually embraced the technology as it is rolled out. He said he expects all Alliant debit cards to be contactless by 2022.
“We have seen contactless debit card transactions triple,” he said. “We have noticed that our members may prefer the contactless option for small, quick purchases, like a coffee or a lunch break. We believe that the use of contactless will increase as we issue more cards. “
Research has shown that contactless credit and debit cards are the most popular payment options for CU members, followed by mobile wallets. The most recent PYMNTS study nonetheless indicated that 86% of UCs invested in mobile wallet innovations last year, while only 34% invested resources in contactless cards. Grover said Alliant’s priority, on the other hand, is funding the features that members are most interested in.
“We invested in debit cards and were well positioned as the pandemic accelerated [the number of] members who want contactless cards, ”he said. “We have continued to invest in contactless and mobile wallet features.
Grover predicts that the use of contactless payments will increase as more merchants activate the technology and consumers expect the ease and security of this type of payment.
“The payment experience is evolving and it’s important to stay on the cutting edge of technology,” he said. “Alliant is excited to continue to provide the digital solutions our members have come to expect as their needs evolve. “
Credit unions that fail to catch up with consumer preferences for innovative contactless payment options risk having their members pull out in favor of FinTechs and banks. Those who not only hear but also act according to the wishes of their members can position themselves to gain long term loyalty from their members.