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Written by Cyndie Martini
on April 06, 2021

2020 saw a lot of changes in payment and shopping behavior. However, it was not an easy transition. Once banks and credit unions closed their branches, customers that were used to in-person services were left with a new reality. There was no transition or onboarding. In an instant, many services became DIY and customers became fully digital, whether they wanted to or not.

Most banks and credit unions did their best to educate customers that the majority of services they were used to as in-person were still there digitally. But trying to move so many people into a new behavior in such a short period of time turned into a Herculean task.

In addition to the pandemic, there are many reasons to push education so that customers can be more DIY and digital. One of those reasons is a decrease in costs. In-person transactions cost far more than digital transactions that are processed completely by the customer. But some customers are just fairly resistant to such change.

That might be more of an American thing. Consider how payments are handled in countries such as China. Imagine signing up for Twitter or Instagram but instead of tweeting or posting photos, you pay your cable bill or send someone money. In China, those apps aren't Twitter and Instagram but are social media apps such as Alipay, with 54.4% of the payment market in 2019, Tenpay (39.4%), and WeChatPay. In China, a social media app can do about anything you need it to. Also, Chinese consumers sort of skipped the credit card, going directly from cash to digital payments.

In the U.S., cash still counted for 26% of payments in 2020, according to a Federal Reserve Bank of San Francisco report. Debit cards came in at 30%. This is far from a fully digital customer. These ecosystems (cash, debit card, credit cards) are also disconnected. Digital wallets are starting to catch on in the U.S., with a lot of incentive from the year 2020.

For a fully digital customer, the U.S. consumer is heading in the right direction. But the transition will take a while. Banks and credit unions may be able to speed up that process a little by continually pushing their digital/DIY services and educating customers. 

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