At a time of economic uncertainty — with high inflation rates and 74% of consumers concerned about their personal finances — consumers increasingly want payments choice and flexibility. In PSCU’s “Eye on Payments” survey, 61% of consumers reported using a greater variety of payment methods than they had previously. Notably, the use of and interest in digital payments is extensive, with 54% of consumers now making a payment or banking on their mobile phones, a 15% increase from 2019.
Credit union (CU) members are no exception to these dynamics. A PYMNTS and PSCU survey revealed that 66% of CU members want more payment capabilities. Mobile payments are particularly popular: 53% of CU members are interested in mobile banking capabilities, up from 47% in 2021. Considering that 29% of financial institution (FI) account holders would switch FIs in search of more innovative products and services, CUs must meet member demand for more innovative payment options.
The latest “Credit Union Tracker®” explores how important it is to offer digital payments in the present economic context and why credit unions must meet their members’ digital needs.
Around the Credit Union Space
A recent Pew poll revealed that consumer use of cash is plummeting. The share of Americans who reported not using cash for a purchase in a typical week soared to 41% in 2022, up from 29% just four years ago. Just 14% of Americans reported using cash for nearly all their purchases.
Meanwhile, a survey from FinanceBuzz found that U.S. consumers utilize debit cards more than credit cards, with nearly seven in 10 Americans reporting they use debit more than credit. For Generation X consumers, the preference for debit was even stronger, with 73% of Gen Xers using debit more frequently.
For more on these and other stories, visit the Tracker’s News and Trends section.
An Insider View on Staying Ahead of Members’ Digital Needs
With consumers more interested than ever in digital payments and more innovative services, CUs must keep up with demand or risk falling behind CUs that do. One way to do this is to stay ahead of the innovation curve, ensuring that the right capabilities are in place to meet consumer needs when they arise. How does this work, though?
To get the Insider POV, we spoke with Sumeet Grover, chief digital and marketing officer at Alliant Credit Union, to learn more about how the CU stays ahead of its members’ digital payments needs.
The Factors Shaping Consumers’ Payment Preferences
Speed, convenience and ease of use. These are the factors driving consumers’ interest in a variety of payment options and digital technologies. Contactless payments epitomize this trend. PSCU found that, in 2022, the share of CU members using contactless payments rose 14%. When asked why they used contactless, consumers’ top three reasons were ease of use, convenience and speed.
Credit unions can meet this demand and attract the next generation of consumers. One study found that only one-quarter of CUs had plans to provide real-time payments in 2022, despite PYMNTS research indicating that nearly half of consumers are at least very interested in real-time payments. It is clear, then, that CUs not already offering real-time or faster payment options should consider doing so.
To learn more about the factors driving members’ interest in digital payments and how CUs can respond, read the Tracker’s PYMNTS Intelligence.
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.
We’re always on the lookout for opportunities to partner with innovators and disruptors.