As we continue to shift towards digital transactions, the ways we move money are evolving rapidly. From contactless payments to instant transfers on our phones, the need for physical currency is dwindling. Fewer people than ever carry cash daily, and as this trend accelerates, investing in smarter, more efficient payment methods has never been more critical—and digital banking is leading the charge.
The Pros and Cons of Payment Methods
As our habits and technology change, so do our payment options. But each method comes with its own costs and benefits:
- Cash: Cash is straightforward, with no delays or fees, making it the simplest option. However, it requires planning—you must have enough cash on hand, and it's not always convenient to find an ATM.
- Checks: While you only need one check for a variable amount, checks are often slow to process. There’s also the risk of overdrafts or bad checks, and it’s easy to forget to carry them.
- Credit: Credit cards are highly convenient for spontaneous purchases, but they come with interest risks and aren’t ideal for person-to-person (P2P) transactions. For users, it’s essentially borrowing money, and non-payment is a risk for issuers.
- Debit: Debit cards are increasingly popular, with 78% of consumers preferring debit cards for the majority of their purchases. They limit spending to available funds, avoiding interest fees, but like credit cards, they’re not always viable for P2P transactions.
Of these, cash has the lowest direct cost. But fewer people carry cash today. In our on-demand world, where everything is available instantly, consumers seek fast, frictionless payment methods. Digital payments meet these expectations and address the shortcomings of traditional payment options.
The Advantages of Digital Banking
For seamless, uninterrupted money transfers, digital banking is the way forward. As society moves away from cash, the next logical step is going card-less.
Frictionless P2P Transfers
Services like Zelle® enable instant transfers from one account to another without needing cash, checks, or cards.
Automatic Record-Keeping
Cash transactions often go untracked, but digital banking provides a clear record of every transaction, offering a built-in “check register” for the modern age.
Convenient Bill Payments
Whether it’s paying bills or transferring funds to a friend, digital banking makes it easy. With the right core processor, everything is accessible within one app, eliminating the need for multiple platforms.
Enhanced Tracking
As members make quick and easy payments, credit unions gain greater visibility into spending habits. This insight allows for more personalized product and service offerings.
Contactless Payments
Mobile wallets have surged in popularity for convenience, but with the rise of COVID-19, contactless payments are more relevant than ever. Zelle® has seen significant growth, particularly among Millennials, Gen X, and even Boomers, who now appreciate the safety and ease of mobile transactions.
The Future of Banking
Digital banking is the future of money, and offering robust digital payment solutions will position your credit union as part of that future. FLEX has partnered with Zelle® to provide P2P payments directly within the FLEX mobile banking app. This integration offers a fast, secure, and convenient way for your members to send and receive money—typically within minutes.
Ready to embrace the future of payments? Download the eGuide to learn more!
