Consumers’ migration to using contactless payment methods more often for their speed and convenience was only accelerated during the onset of the pandemic last year.
It is easy to see why contactless payments are growing in a time of social distancing and touchless safeguards to prevent spreading the virus. The global contactless payment market is projected to reach $18 billion by 2025, in fact, up from $10 billion last year — a nearly 12% compound annual growth rate (CAGR).
The January “Credit Union Tracker®” explores the latest development in the credit union (CU) sector, including an examination of why it is so important for CUs to expedite their digital transformations and how they can help accommodate pandemic-induced challenges.
Around the Credit Union Landscape
Looking ahead at 2021, positive signs are on the horizon for the industry despite strains on CU operations due to the pandemic. President and CEO Chuck Fagan of credit union service organization PSCU said that while financial institutions (FIs) had forecast returns on assets (ROAs) would fall to 30 basis points in the new year, CUs have told him they are gaining confidence regardless. Fagan said CUs have seen deposit balances rise, a sign that consumers have been careful about building savings, reducing debt and compiling barriers against financial shocks.
The pandemic has been driving consumer payment choices and purchasing behaviors, influencing how customers transact, which payments they use and why they use them, according to a new survey. PSCU’s recent 2020 Eye on Payments, which polled more than 1,500 CU members and other FI customers in the United States, found 70% of respondents decide how to pay for a product or service based on which safe options are available at the point of sale. CU members who reported shopping online at least several times a week increased by nearly 50% since the pandemic began last spring.
Los Angeles-based immigrant-focused technology solution provider Welcome Technologies has announced that it has selected PSCU to provide processing and support services for its first credit card offering. Welcome Technologies offers a platform that connects its 2 million immigrant members with products and services they need to thrive in their new country, including access to financial services. Many immigrants are unbanked, lack credit scores and even spend a collective $50 billion annually on predatory financial products.
For more on these and other stories, check out the Trackers News & Trends section.
Affinity Federal Credit Union on Prioritizing Digital Transformations, Digital Upgrades
CUs that prioritize digital upgrades combining analytics and automation are less likely to see their customers drift to larger FI competitors. Affinity Federal Credit Union is one such CU that began upgrading its systems in 2016 as the New Jersey-based CU began its evolution to an automated service model. The goal was to create virtual channels where members can interact using mobile and online banking, and its improved customer center.
Jacqui Kearns, chief brand officer for Affinity Federal Credit Union, talked with PYMNTS about why CUs must fast-track digital innovation to meet security, customer service and competitive challenges, especially during the pandemic and beyond.
To get the full story, download the Tracker.
Deep Dive: Why Contactless Payment Offerings Are Crucial for CUs Amid the Pandemic
Contactless payment innovation is underway at the nation’s CUs as the public shuns cash and even physical cards to lower the risks of infection. One poll found that 82% of consumers favored banking digitally over visiting branches, even before the pandemic began. As members shifted to online and mobile app banking, CUs were forced to compete with tech-savvy competitors.
This month’s Deep Dive explores what CUs can do to help meet members’ growing demands for contactless payment options and touchless digital features, and why these payment trends are expected to stick around.
Read the full Deep Dive in the Tracker.
About the Tracker
The “Credit Union Tracker®,” a collaboration with PSCU, is your go-to monthly resource for updates on trends and changes in the credit union industry.