7 Reasons Why Prepaid Is The Right Choice For Credit Union Members
In the first part of my blog series on Credit Unions, I talked about how Prepaid Improves Relationships With Credit Union Members. For part two, I present to you seven reasons why prepaid is the right financial tool for credit union members.
1. Trust & Security
A prepaid card is among the safest ways to handle finances. Prepaid cards greatly reduce the security risks related to cash, cheque, and bank fraud. All data is encrypted and totally confidential. Most prepaid cards have protection against lost cards, theft, and unauthorized transactions, so if your card is stolen you aren’t at risk of losing funds or damaging your credit.
2. Members Can Grow Their Money & Build Good Habits
People don’t want to use credit cards and incur debt, that much is obvious. Prepaid cards are a great tool for budgeting. According to a Leger survey, 40 percent of Canadian consumers would like a payment card with a set spending limit. 82 percent of Canadians want a payment card where they would not be charged those fees. In the same survey, 15 percent of Canadians rarely or never stick to a budget and 12 percent never even set budgets. In addition, 30 percent find it difficult to track their spending with their credit and debit cards.
3. Instant Issuance
There is nothing more satisfying than going into a financial institution, signing up for an account, and then walking out the door with an activated card and using it. This is called instant issuance. Your product is in your member’s hands immediately. Your members don’t have to worry about waiting around for days for a card to come in the mail. The next step is the digitalization of this process–making the card/account available to be loaded into a digital wallet.
4. Card Control Is Key
With digitization and modernization comes control. With digital prepaid products, credit union members have the ability to set limits, turn the card on or off, check finances on the fly, track balances and purchases on their mobile devices, and more. It’s this kind of flexibility that drives engagement and loyalty from credit union members.
5. Custom Branding
Custom card branding puts your logo and credit union name on the front of your members’ prepaid cards, so they will know, each and every time they use their card, that your credit union is taking care of them. Branded gift cards given by members to family, friends, and coworkers are a great way to get free word-of-mouth advertising and promote your credit union.
6. Rewards Programs:
A recent survey concluded that only about 11 percent of credit unions feel that their rewards program is very effective at driving debit card usage. Debit card rewards are still relatively uncommon with credit unions. A CO-OP study showed that 65 percent of credit unions are not currently using debit rewards. Prepaid is a different beast altogether.
A well-executed incentives and rewards prepaid program is a proven effective way to instill loyalty and engagement. Rewards drive behaviour and engagement throughout the customer lifecycle, and can play an integral role in connecting a member to the credit union and growing that relationship. The holiday season is a great time to start offering rewards to your members.
Everyone like rewards, everyone likes points that convert directly to cash, and everyone likes free things. Your credit union members don’t have to do anything other than what they would already be doing anyways: using their card.
By incentivizing the use of prepaid, you engage your members and help them incorporate prepaid into their day-to-day payment activities, such as making bill payments, grocery store purchases, and more. The more members use their cards, the deeper the relationship you will have with them. Reward your members for linking to e-wallets, signing up for mobile notifications, joining email newsletters, and more to solidify this relationship!
7. Understand The Underbanked
Prepaid cards are also a convenient option for people who do not have, or cannot use, a traditional bank account. Offering a prepaid card is a great way to develop a relationship with would-be credit union members. According to Pew research, more than 40 percent of people who use prepaid cards don’t have a checking account, but most of them are planning to open a traditional account to help address their savings and loan needs. Help them get a headstart on their finances.
It’s time to offer a better consumer and employee experience. Forget about issuing rewards or payments via cheque. Prepaid payments are the way to reward channel partners and employees for meeting sales goals, and for rewarding customers who make purchases. Combine that with the ability to monetize your payment program and everyone wins.
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