Trends that were underway pre-pandemic took a front-row seat after March 2020. Once the government instituted lockdowns, consumers and businesses had to scramble for solutions to what used to be everyday, ordinary, second-nature tasks. Going to a restaurant, bank, credit union, even a grocery store all became big hurdles. For those who weren't used to shopping or doing business online, a new world was about to open up.
Or was it? Businesses that didn't have a fully online purchasing process in place left online consumers out in the cold. As supply chains were disrupted, consumers weren't able to find what they needed. To add insult to injury, as more transactions moved online, hackers took notice and began to permeate the lives of employees and consumers alike.
The resilient consumer quickly adapted to this new landscape. Retail foot traffic dried up as online transactions continued to climb. Consumer payment preferences changed, as well. Debit card spending took off, outpacing credit card spending. Car rental companies have certainly experienced this change in payments as debit card use has gone through the roof, FIS Credit Union Division Executive Bill Hampton said to CUInsight.
With more awareness of hackers looming in the background, consumers' online security expectations of retailers and banks have also increased.
Pre-pandemic, banks and credit unions were slowly moving to digital payment methods and more digital services. But many of these institutions never envisioned their lobby traffic coming to a halt or, at best, a trickle. This created a massive rewiring to support consumers and employees in a fully digital world.
With limited mobility and social distancing, digital payment methods, including contactless, win out over card-present transactions. Any credit union that believes payment patterns will go back to 2019 is mistaken. The increased use of digital and contactless payments are now a permanent fixture for the consumer.