RANCHO CUCAMONGA, Calif.—The COVID-19 crisis is changing the way consumers interact with payments, and only putting new emphasis on the need for credit unions to respond strategically, according to one person.
“You need to have a payments program to match what your members are looking for,” said Bruce Dragt, chief product officer at CO-OP, adding the company’s Developer Portal can help CUs address the new digital experiences members are—and will be—looking for as the pandemic persists and then ends.
During CO-OP’s THINK20 Virtual event, Dragt explained there will likely be different kinds of consumers coming out of the pandemic. The differences will largely be based, he asserted, on personal situations, and therefore how they interact with payments and what they need from these tools will be very different.
Amanda, Barry and Carol
“We see three different kinds of people. There is Amanda—she has stayed fairly consistent during the crisis with payments; she’s someone who has had income during the pandemic,” said Dragt. “There is Barry, who got furloughed during the pandemic, but gets rehired into his position, so we eventually see transactions coming back from him. And then there is Carol, someone who lost her job and won’t have a job coming right out of the crisis. How each of these types of people interact with payments products is going to be very distinct and different.”
The Transaction Data
Dragt said that’s why credit unions need to be able to work even more closely with their member and transaction data coming out of the pandemic than they did going in, noting CO-OP offers tools to help them with these efforts.
Dragt said not only should the data be leveraged to identify important spending patterns from these individuals, but also how they may prefer to use their payments tools, such as preferring contactless cards, digital wallets or typical chip and pin plastic.
He said all of these kinds of analyses will be critical for credit unions to keep spending volumes where they need to be. As CUToday.info has reported, analysts are concerned about interchange revenue dropping dramatically for financial institutions during the pandemic—and that will likely persist coming out of the crisis—as people spend less, not only to save money but to avoid contact with others.
Moving Forward
“As we move forward, the nature of spending patterns will emerge for individuals,” noted Dragt.
There will also likely be a greater need for payment immediacy.
“We think there will be a greater emphasis from people on the need to move money right now,” said Dragt. “Which is where a solution like Zelle can come in…There are unique things that go on within an individual’s lifestyle that we have to be able to stay on top of to remain top of wallet.”