The financial world has already seen and will continue to see more competition in 2022, especially in regard to payments. Between the influx in buy now, pay later (BNPL) payments, and consumers' desire for faster, easier transactions, it's safe to say that rivalry is at an all-time high.
This year, credit unions (CUs) everywhere are bound to witness several new payment trends arise--ones that may give you a run for your money. If you missed it, be sure to check out Part 1 of our Payment Trends in 2022 Series to learn about peer-to-peer payment solutions, the importance of credit and debit card contactless payments, and BMPL. In this second part of our series, we explore additional payment trends your credit union should watch out for.
Many financial service providers have engaged in dissolution, ultimately letting consumers manage their multi-faceted finances rather than creating a one-stop shop. However, consumers are overwhelmed with choices, trying to balance numerous subscriptions, devices, etc., which is why they are now looking for consolidation. With a super app, they can conveniently make payments, buy groceries, work, find entertainment, and so much more, all within a single interface. As a credit union, you can reduce third-party contracts and utilize this technology, so your members can enjoy a seamless, comprehensive app where they can do all their banking from one place.
As the world becomes more and more connected, embedded payments will become increasingly common. These types of payments are automatically-billed purchases that occur through a non-financial app or device, such as a smartphone, chip, or some type of transponder. An example of an embedded payment is when your car goes through a toll and is charged using the device on your windshield. Embedded payments enable innovation within the financial realm, allowing the user to pay for something instantly. Credit unions can use them to create new streams of revenue, build new partnerships, and even reduce member servicing and acquisition costs.
It's common knowledge that consumers want to conduct transactions quickly. However, people, especially business people and gig workers, now want to transfer and receive funds in a matter of seconds. This real-time payment strategy could eventually lead to daily payroll and tax payments, increasing efficiency and speed of fund transfer on a global scale. Your credit union can benefit from real-time payments, including enhanced member engagement, improved member relationships, and a lower risk of members resorting to other non-financial-institution apps.
Increased Card AcceptanceAlthough major credit card companies like Visa and Mastercard have suffered a few losses in recent years (mostly from BNPL), they're actually in a pretty good spot as of late. As open banking continues to thrive in the industry, these companies will continue to occupy new spending streams and move money using multiple rails (B2B, B2C, P2P) instead of just consumer transactions. The same goes for credit unions. Accepting more cards at your credit union will only open up the door to a wider member base and a plethora of revenue opportunities.
The Payment War Rages On
As you can see, financial institutions need to work even harder and that much smarter to keep up. Credit unions of all sizes must rise to the occasion and triumph against the competition's many super apps, embedded payments, real-time payments, and card acceptance. In the coming days, it will be essential for CUs to take inventory, innovate, and deliver top-notch services that exceed member expectations.
Do you have the cutting edge technology it takes to stay one step ahead of your competitors? At FLEX, we offer a fully-integrated, advanced card management system, providing members with financial freedom and your credit union with valuable data. Take the next step in redefining the credit union experience by checking out our FLEX Cards Management eBook today to learn more!