From EMV to Apple Pay, rewards programs to increasing fraud, the payment technology industry is changing daily, and members of your credit union have questions. It is imperative for CU's to educate their members to give you the advantage over banks. In previous blogs we have discussed how credit unions have a significant advantage over banks due to the element of trust. Credit union members display a greater level of trust in their financial institutions than bank members, and this is key to credit unions gaining market share. Displaying a willingness to understand and educate members on the dynamic world of payment cards is your opportunity to gain even more trust. Here is a great article to read up on: The changing face of payment technology: What members need to know (but probably don’t):
From mobile P2P to EMV technology and beyond, the payment industry is rapidly changing. And while consumers are eagerly embracing new payment technologies, many do so without fully understanding their benefits and risks.
This dynamic presents an opportunity for your credit union to shine. Educating members on how to leverage new payment technologies while protecting themselves against fraud is a valuable service you can provide that will keep your credit union top of mind.
So what exactly do members need to know about payments?
“Consumers are faced with many alternative and sometimes unsecured options for payments, and the risks involved may not be apparent to them,” said Lois Hansen, vice president of product development for CO-OP Financial Services.
Jennifer Kerry, CO-OP’s vice president of credit card services, adds, “The importance of security can’t be emphasized enough. However, security is just one attribute of a great payment product. A prominent trend in payments today is the use of rewards. Get your rewards program squarely in front of members for their benefit and yours.”
Hansen and Kerry list seven things you should tell members about today’s changing payment landscape:
Remind them to stay vigilant. Consumers like technology to be fast and easy, but speed and simplicity don’t equal security. Hansen recommends advising members against using social media sites for payments. “Also, let them know that an authentication process should be long and involved,” she said. “Consumers need to stay away from any payment site that relaxes its standards in this area. Make sure your members know that proper authentication is well worth their time from a security standpoint.”
Inform them about your rewards programs. Eighty percent of credit card transactions are made using rewards cards today. “Your members value rewards and may not know about your program,” said Kerry. “In particular, tell them about your merchant-funded rewards programs, which allow them to benefit just by shopping at places they already frequent.”
Advise members on when to use debit and when to use credit. Both have their advantages – credit is typically more secure, but debit can be easier for budgeting purposes. CO-OP offers a wealth of information on how consumers can use each method most effectively. Direct members to the blog at www.co-opcreditunions.org for more details.
Answer all their Apple Pay questions – before they ask. When Apple came forward with tokenized mobile payments last year, it was a fun new way to pay. And when Visa, MasterCard, Discover and others joined the Apple Pay ecosystem, it was a turning point for the industry and for the way members use payment methods. “Your members may not realize just how secure tokenization is, so tell them about it,” said Hansen. “Everyone wins. Your members experience the convenience of Apple Pay, and you as a credit union get the interchange.”
Update them on EMV technology. Hansen expects EMV payment cards to gain momentum nationwide by mid-2016. She said, “While your members may have EMV cards already, many merchants still don’t have EMV-enabled card readers. Let members know that their EMV cards are likely running as magstripe transactions today, which means they are not receiving the added protection of enhanced EMV security technology. That will soon change, though, as consumers gain appreciation for the chip card and merchants follow suit.”
You partner with top fraud protection providers. Tell members how hard you work to protect them and their cards. In addition to working with Fair Isaac Corporation (FICO), the number one source for fraud detection, CO-OP applies advanced data analytics tools to quickly uncover fraud wherever it occurs. Such provider partnerships, and the security they bring to member accounts, is a competitive-advantage story credit unions can tell members.
Demystify Person-to-Person (P2P) payment technology. Direct payment to another person, account-to-account in real-time. It’s a marvel of making payments today, and members need to both understand it and know that you offer it. For CO-OP, Hansen says, “This product line is core to our business and will be expanded with new solutions as the technology advances.”
According to Kerry, “Member education is so important. Your members look to you for guidance. Opening up these dialogs both demonstrates your leadership and sets the stage for deeper, more lasting member relationships.”
