How to Unlock Your Credit Rewards Program’s Full Potential to Delight Members
As the economy opens back up, credit card spending is beginning to reach pre-pandemic levels. Now is a good time to re-evaluate the strength of your own credit program. Since 42% of cardholders use their credit cards to earn rewards (Experian), an effective rewards program can be a significant motivator to make your card top-of-wallet for members.
In today’s digital age, consumers are used to customized offerings and giving direct input into the creation of services and products. They also expect comprehensive service that supports their personal goals. By focusing on these key expectations, your credit union can unlock the potential of both its credit program and member relationships.
How Prepaid Cards Meet 2021 Travel Trends
Getting the Most Out of Your Networks
We all know your PIN/POS networks are an important aspect of your debit card program. However, it often becomes an overlooked element and not a part of your overall debit strategy. Here are some tips when evaluating your networks:
- Don’t be “over-networked.” It is important to limit the choices that merchants have at the point of sale. The merchant’s intent is to send that transaction via the route that incurs the lowest fee, therefore you receive lower interchange. If you’re currently carrying more than one network (i.e. STAR, Pulse, NYCE), establish a plan now to trim down –only one network is necessary. Doing so not only has the potential to increase your interchange income, but may also reduce expense at the ATM.
- At the point of sale, merchants establish the path an authorization will take; and it’s their intent to route the transaction through their least expensive network. Keep in mind, if the cost is low on the merchant side, so too is the interchange income on the issuer side. By having only one network, your credit union controls the authorization path and thereby the interchange earned at the point of sale.
- At the ATM, think of this in reverse: the ATM owner seeks to earn the highest interchange, and issuers need to minimize this expense. Here the same principle of limiting network choice applies—with only one network to route through, the issuer establishes the ATM transaction costs they will incur.
- If you are unsure about network interchange see the Federal Reserve Interchange Study.
- Learn your members behaviors. Find ways to encourage your members to use their cards. Promotions to establish recurring payments; like utilities, insurance premiums and streaming services. E-commerce transactions earn higher interchange, so try to become the card attached to the Buy Now button. Review reports to see which members are using your cards for DoorDash and Uber Eats. Quick Service Restaurants (QSR) transactions are up significantly since last year.
- Educate your members. Some of your membership may not be aware of all the key features of your debit program. For example, are your members aware that they can prevent fees for ATM withdrawals. A member can request cash back at the register when conducting Point of Sale transactions. The nice part about this is that your credit union receives interchange on the entire dollar amount. In addition, many credit unions participate in surcharge free networks but often fail to continually promote this to their membership. One thing that should continually be reinforced is the safety and security of pinned transactions. Your members card has specific features designed to avoid fraud; the EMV chip, unique CVV code, and member created PIN are all assisting with preventing fraudulent transactions.
- Keep an eye towards the future. Person to Person (P2P) payments are becoming more popular especially amongst your younger members. Some of the P2P methods use specialized rails and are not a part of your debit network, these transactions would not receive interchange income. Evaluate reports and keep an eye on pin-less transaction, these transactions will show up on reports as PAVD. Your interchange could vary each month as merchants increasing select this method of transaction routing. Also, your processors will start providing card-less ATM withdrawals using their mobile app. It is important to stay up with how your debit processor, core, and the local ATM terminal are keeping up with this new technology.
Your LSC Team of experts are available to answer any questions you might have about our debit
networks contact your team at LSC.
Helping credit union members enjoy summer of 2021
Last summer we experienced a priority shift that led many of our credit union members to a simple realization: they don’t have to go too far to have fun in the summer. Life in quarantine created the opportunity for at-home adventures by picking up old hobbies and developing new talents. Puzzles, painting, and backyard movie nights became the main event. This summer, with the vaccine roll-out well underway, credit union members will begin to expand their sense of adventure again and we predict spending on local travel and new forms of entertainment will rebound. How can your credit union help? Click here to read more.
Payments Contracts: Top 5 Key Considerations
Payment solutions are one of the most essential products credit unions offer to differentiate themselves from banks and other competition. That is why selecting the right processing partner is particularly critical to member satisfaction, retention and growth. The following are a few things to consider when making the difficult decision of whether to stay with your current payments processor or to convert to a new partner.
- Review Your Contracts – Many credit unions are not familiar with key provisions of their current agreements, particularly in regard to the termination clause or notification period. We have seen terms get extended as new enhancements or product features are added. We would recommend a thorough contract assessment of your payment contracts.
- Understand Your Entire Cost – When evaluating multiple proposals, ensure proposals are inclusive of all related fees, any pass through, network, core, card production, and implementation charges. If a significant price disparity exists, it could mean fees were omitted. It can be helpful to have each of the key areas subtotaled, to determine if any areas are missing.
- Define Your Vision – It is important to establish a clear vision of what you are looking for from both a member and credit union perspective. Evaluating your current portfolio and noting what services you are satisfied with, and what you want to include in the future is a great exercise because the ideal time to add new services is at the start of a new agreement. Be sure to ask what features and functionality that you don’t currently have are on the proposals that you receive.
- Reputation Cost of Poor Service – Established service level agreements for optimal staff and member experience can make a big difference in the credit union and member experience. Low quality service can have a profound effect on your credit union’s reputation. The cost of bad service should be considered when choosing a partner, because not all costs are seen directly on the balance sheet.
- It’s All About Connections – In a digital-first world, ensuring all your member access points and delivery channels work seamlessly is a must. Ask for demos and API integrations with core, mobile and online banking providers. Members are looking for all the functionality of the major card brands, so determine how your card could match up.
There isn’t a one-size-fits-all approach to evaluating your payments partnership, but there are key components that should be measured when evaluating your current payment offerings and in considering a future partnership. LSC takes a consultative approach to the payments partner evaluation process, and can help you understand what to look for in all proposals, including our own. We invite you to contact us at 1-800-942-7124 to learn more
Impact of Changing Consumer Behavior on Debit Cards and P2P Payments
Challenging times have shown us how to cope with change, but most importantly – how to adapt. Ecommerce has quickly surpassed in-person spending and credit union priorities have become clear: improving member experience by providing safe and uncomplicated digital payment options quickly has jumped to the top of our list. From the start of the pandemic, we’ve seen two interesting payment trends because of changing consumer behavior. These include peer to peer payments (P2P) and digital wallets. Click here to read more about these digital payment trends.
How Your Credit Union Can Ease Member Fraud Concerns
Fraud is one of the biggest current issues for credit unions and their members. When fraud occurs it interrupts members’ lives, leaving them frustrated. This is where your credit union can step in and become part of the solution.
The right digital tools can empower your credit union to defend against fraud, respond quickly if it happens, and help smooth the way for impacted members to get their lives back to normal. It all contributes to the member experience. Below are descriptions of three digital tools that can help your credit union address member fraud concerns.
- Digital card issuance enables your credit union to issue a replacement digital card on demand and deliver it into a mobile wallet for immediate use online and in apps. While members wait for a physical card, security features restrict in-person transactions until the member activates the physical card.
- Online card controls or apps allow members to turn their cards on and off, track spending, get real-time alerts, dispute charges and report missing cards to help minimize the impact of attempted fraud.
- Tokenization converts sensitive information into tokens that mask the PAN data. This token is then transmitted for authorization, averting a fraudster from capturing critical card information. Members using a mobile payment wallet can also utilize their phone’s security features to block others from accessing sensitive data.
With the help of digital tools, your credit union can protect member information and simplify life for those who find themselves dealing with fraud issues. It’s a key step towards making your credit union the primary financial institution for members. By using this technology and helping members understand it, a credit union can continue thriving well into the future.
LSC and our partners are here to help you understand the digital payment technology available to you. Contact us at 1-800-942-7124 to learn more.
How Prepaid Cards Can Help Your Members Stay on Budget This Year February 2021
It’s not just tax season, it’s also the season of making new year’s resolutions come true. For your members, now is the time for considering ways to tone their financial health. A simple, easy to follow budget can help accomplish this goal. Your credit union can support member success by offering the right tools to help them manage their budgets more easily.
Our partner GreenPath Financial Wellness knows the ins and outs of healthy budgets. We’ve assembled three tips from them to share with your members on how they can use prepaid cards to make following a budget easier. We’ve assembled them into an infographic that you can download and use as a handout to your members.
At LSC, we’re focused on helping your credit union build better relationships with members. This includes offering a full-service prepaid card program that can benefit both you and your members. To learn more about how we can help your credit union develop a prepaid card program, contact the LSC sales department at 1-800-942-7124.
AGP Testimonial January 2021
Credit union member satisfaction stems primarily from impressive customer service and a strong well-rounded portfolio of programs and services. Including a credit card program in your credit union portfolio is a benefit to members and leads to growth for the organization; however, it is often difficult and overwhelming to implement and maintain.
“The Accelerate Growth Program from LSC has been invaluable to growing our card portfolio. We have seen an increase of nearly 100%! Their turnkey marketing collaterals makes promoting the program easy and seamless. LSC’s dedicated customer service team works in full collaboration with our team here. I appreciate their consulting and analytical approach to tailor the program to our credit union’s needs.” – Karen Intracaso, CEO, Kaiperm CU
Many credit unions, like Kaiperm, have seen tremendous success in their own programs. In an ideal world, your credit union would continue on an upward growth pattern that created a sense of excitement for members and staff alike. In the real world, though, it just isn’t that simple. To grow, a credit union needs to improve its offerings and stay within a comfortable budget. Growing with credit cards has never been easier because LSC is an extension of your credit union team.
“If you are looking to grow and promote your credit card program, FECCCU highly recommends LSC’s Accelerated Growth Program. We are a small credit union and always looking for fresh ideas to market our cards that require few operational tasks and stay within our budget. This plan does just that!” -Sabrina Oshelski, Manager, Federal Employees of Chippewa County CU
With a low annual campaign fee, LSC creates the promotions and marketing materials. Each quarterly theme is designed to be eye catching and impactful for current financial trends. AGP takes the guesswork out of credit card program growth. Marketing, in-house and digitally, is a big task and often an enormous expense. Between the manpower needed and the budget, its often impossible for credit unions to get the full impact of a multi-channel marketing campaign.
“Each year the timely promotions have provided seasonal marketing materials full of vibrant colors to utilize in electronic marketing as well as member facing in the office, and at an extremely cost-effective price. The four annual promotions take the planning off our shoulders, and all we need to do is implement the campaigns.” -Robin J. Juhler, VP Lending, Mid-Illini CU
LSC’s AGP program allows credit unions to focus on member satisfaction and cultivate valued member relationships by taking the guesswork out of credit card promotions. Let LSC do the heavy lifting so your credit union staff can keep their eyes directed where it really matters, at the members.