By Robert McGarvey
Two stats jump out of a PSCU and Javelin report entitled “The Credit Union Guide to Opportunities in IoT, Biometrics and E-commerce.” Credit union members love their smartphones -80.9% own one. That’s roughly comparable to big bank customers – 88.4% of them own a smartphone.
Where credit union members falter however is in mobile wallet usage. 46.3% of big bank customers have used a mobile wallet – such as Apple Pay – in the past 90 days. But just 10.8% of credit union members have.
In the past week 3.7% of members have used a mobile wallet. 19.3% of big bank customers have.
Those stats have to scare you. Credit union members have smartphones. They just aren’t using them to pay. Big bank customers are 4x more likely to pay by phone.
Why are credit union members so slow to adopt mobile wallets? It’s all the more puzzling when so many big retailers have embraced Apple Pay and that typically also means Android Pay and Samsung Pay too. It’s now easy to go a day without ever using plastic cards, from coffee in the a.m. at Starbucks using its app through stocking up on dinner groceries at Trader Joe’s or Whole Foods with Apple or Android Pay.
And there are growing numbers of consumers who are coming to see mobile wallets as a convenient and secure way to pay.
But there just aren’t many inside credit unions.
PSCU and Javelin said that the relatively low credit union usage of mobile wallets compared to big bank customers leaves credit unions “vulnerable.”
Partly this anemic usage is because credit union members skew older and the demographics that have most jumped on mobile wallets are younger.
Another factor: few credit unions have actively marketed mobile wallets to their members. Initially, when Apple Pay debuted, as credit unions rolled out the tools they blew trumpets to announce they had the latest technology. But now many are silent. Plainly they would rather tout other products to their members, in part because mobile wallets such as Apple Pay cost a credit union money while many other products – such as a credit union’s own credit cards – make the institution money.
That’s understable but also short-sighted. Mobile wallets are the future of payments and an institution that plans to hang around needs to be at the forefront of surging consumer usage.
“When a credit union has Apple Pay it helps position it as more progressive,” said Bryce Roth, a marketer with Verve Credit Union in Oshkosh, WI. He added that every week questions come in, do you have Apple Pay? The answer is yes but, to Roth, the takeaway is that at least some consumers really want to know Apple Pay in particular is available.
Note too: having multiple wallets – such as Android Pay too – just may position a credit union as that much more progressive.
Now for the scary moment. Look again at how much more mobile wallet usage there is at the big banks. The disparity with credit unions is frightening.
At least some big banks have further fueled mobile wallet usage by doling out perks to customers who use them. Chase for instance has promoted mobile wallet usage with a promotion that adds a bonus point for every dollar spent with mobile wallets on some credit cards.
Wells Fargo also has offered sweeteners to mobile wallet users.
What’s a credit union to do? Definitely, think about offering promotional bonuses to encourage usage.
But there are free tactics too. Start by reminding members of the wallets supported by your institution. Make it easy for a member to find this out. DCU in Massachusetts does this well. Study its pages.
Then do as PSCU and Javelin advise: “The key challenge for credit unions will be persuading their members to load their mobile wallets with the credit union’s debit and credit cards instead of those from another banking institution.”
How to get there? Ask – and keep asking.
It’s not easy to get a member to change a credit card preference that has been entered into a mobile wallet. Many have a faint memory of what card is associated with Apple Pay.
Ask and ask again.