Offering Digital Cards: Pros and Cons for Your Credit Union
When people choose to do business with a credit union over a larger financial institution, they typically do so for two key reasons. The first is the personalized experience that only credit unions can offer. Thanks to their community focus, CUs are in a position to really show people that they care, continually going above and beyond the call of duty in a way that big banks cannot.
The second reason has to do with the sheer convenience of the experience that credit unions offer. People want to handle their finances their way, any way, no exceptions, and it's up to your organization to support that. Digitally issued cards, otherwise known as digital cards, are one of the many ways to accomplish precisely that. What's even more significant, they come with a host of benefits.
Digitally issued cards are digital versions of traditional credit or debit cards.
Pro: If your credit union offers digital card issuance, you can be at the front of your members wallet every time they want to buy something. They don't have to come into your credit union to get a new one if theirs was lost. This frees up employee time while increasing your credit union's card use.
Con: Although digital payments are accepted at over 85% of stores, some major chains like Walmart do not accept them. Digital cards are extremely convenient until a store does not accept the payment method.
Pro: By design, digitally issued cards are easy to use. You do not have to spend time and money training your members. If a credit union member can use a phone, they can view their digital card, see spending information, and start using it in a matter of seconds.
Con: Sometimes, digital cards are declined during check out. Even though digital cards require minimal explanation when first issued, your credit union will have to train its employees on how to help members when problems arise over time.
Pro: Your credit union does not have to pay as much for fraud detection and prevention. Digital cards use biometric authentication (fingerprint or facial recognition) to make sure that only one person is capable of using the card. It also uses technologies like tokenization to help maintain visibility over transactions, and encryption to make sure that nobody can intercept important financial information when in use.
Con: Although the risk is low, digital cards can be stolen. This is easily mitigated by instantly closing the card.
Pro: Even if your credit union offers digital cards, you can still offer traditional cards. This expanded set of offers helps your members feel like they have options, and they don't have to look any further than your credit union to find everything they need.
Con: Some members will not embrace digital cards. This decreases their perception of how flexible and convenient your credit union is. Make sure to offer other relevant, personalized features to members who don't like digital cards.
Pro: Another benefit of digital cards and digital wallets is that they create a frictionless experience for members. If someone loses their existing physical card, they don't have to wait to get a new one in the mail. They can use a digitally issued card right away.
In the end, digitally issued cards are a good start toward creating the convenient, enjoyable experience that members crave and the beginning of your credit union's transformation into the digital services powerhouse it was meant to be.
Con: In the event of a digital card malfunction or a member's unfamiliarity with its usage, there is a possibility of frustration arising from this new technology. To address this concern, it is advisable to continue offering traditional cards as a backup solution.
Ready to Go Digital?
If you'd like to find out more information about digitally issued cards for your members, or if you'd just like to discuss your credit union's needs with someone in a bit more detail, please feel free to contact the FLEX team today.