By Brian Scott
COVID-19 may have initially been viewed as driving a temporary shift in consumer behavior, but it eventually became apparent that it was a catalyst for significant and lasting change.
While the pandemic has not necessarily impacted consumer activities like buying groceries and getting prescriptions, it has changed behaviors and habits when it comes to those activities. Consumers who previously made weekly grocery store runs are now ordering and paying for groceries online and getting them delivered to their front doors. Older generations, typically viewed as less technologically savvy, had to learn how to bank with their credit unions online or through mobile apps when branches closed – and quickly realized how convenient and secure these offerings are.
Changing Purchasing Behavior
Many consumers have started using forms of payment that limit physical contact, avoiding cash in favor of contactless options, online shopping and mobile offerings. In fact, 70% of respondents in PSCU’s Eye on Payments study reported they make decisions about how they will pay for something primarily based on which is the most physically safe at the point of sale. The number of respondents that say they shop online at least a few times a week increased by almost 50% since the pandemic started, with the frequency of online purchases increasing among all age groups.
Survey respondents also reported increased usage of mobile apps and online platforms to order ahead for grocery or food pick-up or delivery, with most respondents indicating they expect to continue using these channels post-pandemic. According to weekly transaction insights from PSCU-owner credit unions, Amazon purchases among its owners’ members was up as much as 84% on debit cards and 48% on credit cards as a result of the pandemic when comparing 2019 to 2020.
As consumers look for “clean” forms of payments, there has been a 72% year-over-year increase in Eye on Payments survey respondents that report having a contactless card. Fifty-seven percent of respondents said they used a contactless card at least a few times per month before the pandemic; this number increased to 65% during the pandemic, and 69% anticipate continuing to use it post-pandemic.
And weekly transaction data from PSCU Owners indicates debit contactless transactions have grown from around 8% in mid-January to 14.6% of card-present activity on contactless debit cards, while contactless credit transactions have also grown from 6.5% to 9.3% of card-present activity on contactless credit cards.
How Credit Unions Can Adapt
There was a shift in the payments marketplace several years ago when consumers went from valuing features (like rewards and low interest rates) to valuing experiences. Ease of use, convenience, personalization and security all took center stage when it came to the consumer experience. Many credit unions soon realized that if they really embraced those four areas, members would be more likely to use their payment offerings and the credit union would have a better chance of attracting additional members.
While COVID-19 has transformed the way in which consumers will transact and interact with their credit union moving forward, the four pillars of experience remain the same. Ease of use, convenience, personalization and security are as important as ever, but credit unions may need to enhance, increase or improve the ways in which they deliver them.
For example, while EMV chip cards previously signaled one of the highest levels of security, members now need and want the same protection across card-not-present channels, as well as the ability to set up alerts and controls to know immediately if a card may have been compromised. Make sure your members not only know what types of services your credit union is providing across all channels, but also that they understand how to access and use them.
Credit unions should be prepared to meet members’ new behaviors and habits with the services and offerings they need and expect in the “new normal.
Getting Future-Proofed
Credit unions should consider future-proofing the member experience across all touchpoints, including journey-mapping their members’ experience throughout all channels – whether for payments, rewards or even for potential new members looking to join the credit union to create a seamless and connected experience.
In determining if your credit union is providing the optimal experience, look at these channels and enhance the touchpoints that fall short. Ask, “Are we creating a bundle of experiences so compelling that our members would be willing to pay us for these services?” If the answer is no, your credit union is at risk of losing members to another financial institution that provides a better experience.
The more credit unions invest in future-proofing their member experience and focus on the four pillars of experience, the more prepared they can be to combat any unanticipated catalyst of change in the future.
Brian Scott is chief growth officer with PSCU and partners with industry leaders in payments and community financial institutions to create competitive payments programs. Brian helps credit unions position themselves competitively in their own communities and maintain profitability throughout their payments programs. He spent 23 years in the highly competitive consumer payments marketplace and is a recognized leader in payments solutions and innovative technologies.