CO-OP recently launched its Payments Playbook, which outlines how credit unions can increase revenue through better payment relationships. The Playbook isn't a system, infrastructure, or service that credit unions can utilize. Instead, it is a set of guidelines backed by rigorous analysis. CO-OP's approach is to help credit union's grab a larger slice of the payment pie and become the "primary financial relationship."
As outlined in its Playbook, it is clear that credit unions are missing out on payments:
Of the 20% of households that primarily use a credit union, 60% also use a bank for some type of financial service.
With payments representing 80% of a customer's interactions with their financial institution, payments can be a great point of engagement with customers. There's plenty of room in the payments market for credit unions, and it's only expected to grow. Global payments are projected to reach $2.5 trillion by 2028, according to the Playbook.
CO-OP sets a high bar by saying that credit unions should be on par with payment experiences from Google, Amazon, and Uber’s apps. While that might seem intimidating, it's important to understand that customers are already using those apps and have expectations of what the payment experience should be like.
CO-OP's Playbook lays out four ways that credit unions can better utilize customer engagement through payments:
1.) Focus on Delivering an Exceptional Experience
2.) Leverage Data to Understand and Predict Member Needs
3.) Invest in Tools that Give Members Transparency and Control
4.) Maximize the Member Experience When There’s a Problem
Credit unions also have to be ready for inevitable poor customer experiences and chargebacks. According to a 2019 US Consumer Banking and Wealth Management Study, the experience that made customers (~17% of respondents) less likely to recommend their financial institution was having to dispute a bank fee. CO-OP mentioned that it is building a system to help credit unions address those issues.