Payments continue to shift into digital channels as consumers increase their reliance on payment apps, e-commerce merchants and card data stored with other merchants and billers. This trend is growing more pronounced as younger consumers enter the workforce and develop in their financial lives.
Consumers are accustomed to the ease and convenience of being able to order a ride, apply for a job or request a loan, all from their phone or tablet. And that merely scratches the surface of what’s now possible. As a result, they increasingly expect the same quality of seamless and convenient digital experiences when paying, getting paid and managing their deposit accounts.
Findings from the 2023 Debit Issuer Study, commissioned by PULSE®, reveal that issuers have taken note of consumers’ shifting preferences – and, in some cases, demands - and are addressing them in three key areas: digital payment capabilities, fraud detection and customer education.
Digital capabilities are key for issuers
Enabling enhanced digital capabilities is a priority for nearly every issuer in the PULSE study. They are investing in mobile-app capabilities – many of which are self-service. These include:
- Ordering a new card and tracking their card order
- Instant-issuing cards into mobile wallets
- Activating a card
- Changing a PIN
- Providing issue-related alerts
Some financial institutions are also investing in resources and partnerships to remain competitive in this area.
“Member education is so important because so much of fraud has shifted out of the FI’s control. It has shifted to customers getting socially engineered.”
Credit Union Executive
Issuers include cardholders in fraud detection and prevention
As consumers have shifted their purchase activity to digital channels, fraudsters have followed. Issuers are responding by empowering consumers to combat fraud and safeguard customer accounts through self-service digital capabilities:
- 91% of issuers offer real-time cardholder alerts for suspicious activities
- 81% enable cardholders to respond to those alerts in real time
- 76% offer customers the ability to freeze or unfreeze their card
- 19% allow cardholders to dispute a charge via self-service
Issuers also have undertaken programs to educate customers and drive awareness of fraud tactics.
“Member education is so important because so much of fraud has shifted out of the FI’s control,” said one credit union executive. “It has shifted to customers getting socially engineered.”
Approaches issuers are taking include marketing campaigns, in-person seminars and Facebook Live events.
Education efforts target financial wellness
Another focus of issuers’ customer-education efforts is financial wellness. The goals of such efforts include enhancing consumers’ financial knowledge, increasing fraud awareness and driving consumer use of digital capabilities.
Study participants are providing the following offerings related to financial wellness:
- Spending insights via the institution’s mobile banking app
- Visibility into where the cardholder’s card is on file for recurring payments, also provided via the mobile app
- Educational campaigns providing security tips and promoting security features
- Financial literacy outreach efforts to local schools
Some institutions are also undertaking financial inclusion efforts, such as:
- Offering an accessible debit card, such as one with tactile features enabling blind and partially sighted users to distinguish it from other cards in their wallet
- Reaching underbanked communities through strategic branch location and community outreach
- Allowing consumers to use their preferred name on their debit card rather than their legal name
“Some issuers are using in-app games to attract and empower consumers under age 18.”
Steve Sievert, PULSE Executive Vice President, Marketing and Brand Management
Planning for debit’s future
Forward-thinking debit issuers are aiming to capture untapped market potential, foster lifelong customer loyalty and promote financial inclusion by focusing on customers under the age of 18.
“Some issuers are using in-app games such as Greenlight’s LevelUpTM to attract and empower younger consumers,” said Steve Sievert, PULSE Executive Vice President of Marketing and Brand Management. “ Considering their lack of credit history and the digital shift, a debit card is the ideal payment option for this age group.”
Other capabilities issuers are launching to cater to younger users include:
- Allowance payments via mobile app
- Flexible parental spending controls
- In-app financial wellness lessons
To learn more about how issuers are responding to the ongoing shift to digital payments, access the 2023 PULSE Debit Issuer Study white paper.