Have you had upgrading to contactless payment cards and other digital wallet services on your wish list but haven’t made the move yet? Put those at the top of your priority list, stat. Thanks to the COVID-19 pandemic, the industry has seen a seismic shift over the past six months in the way consumers pay.
What used to be “nice to have” features that would draw in younger account holders are now table stakes requirements across the board, and those who haven’t upgraded yet are missing the boat in more ways than one. Discover why it’s imperative to get in on the contactless card/digital payment trend now, and an easy trick for offsetting some or all of the costs of doing so.
What’s in a name?
“Contactless” is the name of the game right now and for the foreseeable future, as people avoid germ-heavy cash and touching of payment terminals. With contactless debit and credit cards, often referred to as “tap to pay,” no tapping is actually required—just a placement of the card within a few inches of the payment terminal. The “digital wallet” (or “e-wallet”) is another type of contactless payment option; it refers to a mobile phone app or other service that stores payment information in the cloud so consumers can pay via their smart phone or wearable device.
Why do I need to offer this to account holders?
The three biggest reasons your financial institution should issue contactless cards and offer digital wallet services to your account holders ASAP are:
Most of the world is moving toward contactless payment methods, and at a pace highly accelerated with the arrival of COVID-19. According to a Mastercard global survey:
This all leads into the importance of your financial institution being “top-of-wallet” for your account holders—their primary method for all or most transactions. When you earn that coveted spot at the top, your card gets used more, and your financial institution receives the interchange income from every transaction.
Just how much is on the line? Well, in addition to in-person payments using contactless cards, more money was spent online in the U.S. in April and May of 2020 than in the past 12 Cyber Mondays combined! When your account holders reach for your card, that directly impacts your bottom line—in a time when you probably need it the most.
Right now, that position is up for grabs. Nearly one-third of Americans have switched their “top-of-wallet” card to one that is contactless enabled, according to Mastercard’s survey. Globally, 46% have done so; and among those under 35 years old, 52% have made the switch. Is your financial institution ready to be “top-of-wallet”?
Paying for upgrades during a pandemic
Yes, non-interest income may be tight right now. But there’s a pretty easy way to offset the costs of issuing contactless cards, and it requires surprisingly little work on your part.
We’ve been helping financial institutions uncover staggering savings on their vendor contracts for more than a decade. With this depth of industry experience, we can quickly identify how much you could be saving, and then negotiate the most competitive pricing and terms for you.
You might be in the perfect position to implement these services if:
Real-world success stories
Here are a few examples of how financial institutions like yours have used the savings from recent contract negotiations to pay for upgrades they initially thought were out of their budgets:
To get the ball rolling on adding contactless payment options, start with a professional review of your service contracts to determine if there are any savings opportunities. Adding these services will no doubt create stronger value to account holders, and you may be able to also find the additional dollars to improve your bottom line.
Contact me at email@example.com or visit www.JMFA.com/bestdeal to read more about some of our client success stories.
ABOUT KELLY FLYNN
Kelly Flynn joined JMFA in 2008 and has over 20 years of sales and management experience. As the National Sales Director for JMFA Contract Optimizer she leads a team whose charter is to optimize the value of every third-party vendor contract or agreement to help further the strategic vision of the financial institutions they represent. JMFA is a preferred provider for several industry groups.