The business of consumer credit is on the verge of a seismic shift and credit unions need to prepare for the massive changes that are just around the corner.  Digital payment systems are growing in popularity with both merchants and consumers alike, slowly but surely driving the physical credit card to extinction.  Credit unions have long relied on credit cards as an important tool for competing with banks. Historically, they have offered far better interest rates than banks, while also offering more consumer-friendly terms, in order to attract new customers and build loyalty with their existing ones. How can credit unions adapt with the physical credit card in likely terminal decline?

Not necessarily. Credit unions can leverage their existing strengths – their networks, customer bases and brands – while adopting new technologies, to secure their place in the digital world. The key to maintaining their brand advantage will be to find new ways to deliver immediate, measurable value to customers.   Here are some ways to stay ahead in this brave new post-plastic world:

1)      Options. The first step is for credit unions to offer their customers digital payment options. As online financial services like PayPal become more popular, it is more important than ever to develop online tools that make it easier for customers to shop, bank and pay their bills online.  Mobile digital wallets are also becoming increasingly common, as companies like PayPal, Google Wallet and Starbucks offer apps that allow customers to pay directly from their smartphones. Credit unions should invest in Web and mobile infrastructure now in order to offer their customers payment tools and apps that integrate with other providers’ digital offerings that are quickly becoming a part of daily life.

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