Moving Credit Unions From In The Wallet To Top Of Wallet

Among the most exciting trends of the last two decades is the evolution of payments from a focus on transactions to a strategic driver of revenue and growth. Among the most important questions to arise from that general trend is what credit unions must do to take advantage of that opportunity — more specifically, to move from in the wallet to top of wallet.

That question served as the anchor for a recent PYMNTS discussion between Karen Webster and Brian Scott, chief growth officer at PSCU, one of the country’s premier credit union service organizations (CUSOs). PYMNTS caught up with Scott as his company announced the appointment of two new leaders to drive member experience. The announcement goes beyond the actual people involved, as he addressed the broader issues facing credit unions at the dawn of a new decade.

“We’ve made a ton of investments in products and devices,” Scott told Webster. “This is a similar investment on the services side.” More specifically, the two new hires will help PSCU offer more strategic consulting services for credit unions. He said: “It gives our clients an added level of expertise.”

PSCU has named two new account management executives as part of what the company calls its continued commitment to deliver a best-in-class experience. Yvonne Stelpflug and Kim Ploof will both have roles as managing vice presidents of account management.

The hires speak to the increasing importance of a solid, relevant payments strategy for credit unions, which stands as an existential task, as Scott said. “A lot of credit unions underestimate the importance of payments to their futures,” he said. “Many other companies are trying to get into payments, mainly because of the data that comes out of it. Without payments, a credit union goes back to being a savings and loan.”

Among the main payment problems credit unions face is getting their cards into wallets, as well as taking steps — such as offering attractive rewards programs — to get those cards to the top-of-wallet position. According to Scott, that problem stems from at least two different reasons.

First, credit unions are often too focused on avoiding risk (think delinquencies and similar matters). “They focus on the risk and not the opportunities,” he said. Second, many credit unions don’t fully understand the benefits of credit cards.

Even so, credit unions have to deal with payments in ways that will work to future-proof those financial institutions, Scott said. He offered examples of how payments are not only changing but are also becoming a valuable source of activity that can tie together larger ecosystems, such as Kenya-based M-Pesa and Uber, which revolutionized the frictionless payments experience.

Both of those examples serve as lessons for credit unions about how essential payments are for consumers, and how vital they are to innovation, growth and customer retention. “If you get the experience piece right,” Scott said, “efficiency and growth fit into that.”

Indeed, credit unions, in general, are investing in many of the same things as Amazon, deploying technologies and services that look to improve the member experience and the day-to-day interactions with companies that, if done right, pay off across the very long term. Such moves are guided by a strategic view of payments. “This is about tailoring a customer experience they want to create with their members,” he said. “How do we create a great experience?”

In other words, it’s all about making payments pay off for credit unions.