ST. PETERSBURG, Fla.—The payments landscape may never be the same due to the coronavirus pandemic, according to Chuck Fagan.
Fagan, PSCU’s president and CEO, during the CUSO’s Virtual Member Forum pointed to some critical signs that indicate change is here and likely will remain.
“We know the U.S. economy will recover from this crisis,” said Fagan. “Visa reported total U.S. payment volume in May declined slower than in the previous two months—possibly an indicator of economic recovery.”
Fagan said PSCU’s own weekly payment trends data, which CUToday.info has regularly shared, support Visa’s findings.
“At the end of May we had seen six straight weeks of credit improvement while debit is at or above historic growth levels,” Fagan said. “While the travel and entertainment segments remain muted, other segments are showing a rebound, including gas and dining as the country re-opens.”
‘Must be Adaptable’
But Fagan stressed the change being seen in consumer spending patterns may never return to normal and could affect credit union’s business models.
“We must stay adaptable to what that new normal brings,” he said.
Fagan said credit unions must keep pace with existing and new digital options for their members, not just in cards but throughout their banking platforms. He said PSCU will continue to make strong investments in both areas.
The Move to Contactless
The PSCU CEO pointed to how contactless adoption is soaring—not only before the pandemic but certainly after it began.
“Contactless cards are receiving an accelerated focus from consumers,” noted Fagan, citing the move away from cash and concerns over the spread of COVID-19. “A recent Mastercard survey shows 51% of U.S. consumers are using some form of contactless payments. That’s a very large number.”
Fagan added that this shift to contactless is also leading to big swings in consumers’ selection of their top-of-wallet cards, indicating CUs must pay attention to and follow this shift or risk losing transactions.
Fighting Fraud
Turning to the fraud fight, Fagan said PSCU has been making adjustments and investments as it works to keep a lid on CU fraud losses. He noted PSCU uses linked analysis to prevent fraud before it happens, stating the CUSO in 2019 prevented $277 million in fraud losses for its owner credit unions.
Those fraudulent transactions, he added, are being denied at the same time PSCU CUs are experiencing a 99.6% approval rate for transactions at the point of sale.
As for PSCU itself, Fagan said the company is expanding its investment in Lumin Digital—which PSCU launched in 2018–as well as in its payments offerings, call center, fraud prevention, robotic process automation for the back office and more.
Fagan also spoke to how PSCU responded quickly to the pandemic, transitioning more than 90% of the company’s staff in a short period to a virtual work environment.
‘Could Not Be More Proud’
But what Fagan said gave him great pride is how PSCU staff have responded to support their local communities during the health crisis. He applauded their dedication and sacrifice.
“I could not be more proud of our employees,” he said.
While the pandemic has upended the country, so, too have the protests against racial injustice deeply affected Americans, noted Fagan.
“Racism has no place in our industry,” said Fagan. “We look to whatever the new normal is and we encourage everyone to strive for a new normal—one of inclusion and open conversation.”