Payments Trends to Watch in 2021
PaymentsSource, December 2020
Mobile Payments Today cited three trends to watch this year: cashless becoming more common; fintechs tackling the underbanked; and blockchain making it big. While cashless is predicted to become standard in many businesses and regions, concerns about the underbanked persist. That’s why fintechs focused on them can shine by offering no-fee accounts, microloans and tools for customers on government assistance. Blockchain will make an impact in cross-border payments.
PULSE Perspective: We expect demand for faster payments to be a major catalyst for investments in 2021. Additionally, many of the consumer behaviors adopted during the pandemic will persist, such as the growth of ecommerce and the preference for contactless payments.
Green Dot Launches Challenger Bank
Banking Dive, January 2021
Banking Dive reports that Green Dot has launched GO2bank, a challenger institution targeting low to moderate-income consumers. The digital bank offers overdraft protection up to $200, early paycheck access, high-interest savings accounts and secured credit cards. GO2bank has its own charter and partnerships with Walmart, Walgreens and 7-Eleven that give it a network of nearly 100,000 service centers.
PULSE Perspective: Fintechs are increasingly delving into services historically the domain of traditional financial institutions. Their focus is on meeting consumers’ evolving needs. Is your institution marketing its offerings in a similarly targeted way?
Payments Companies Give Credit to Debit
Wall Street Journal, November2020
U.S. consumer-spending growth may be soft, but use of debit cards is rising, reports the Wall Street Journal. Card networks and merchant acquirers have reported similar trends. U.S. debit-card payment and purchase dollar volume collectively rose 23% year-over-year in the third quarter of 2020, more than double pre-COVID-19 growth. And PSCU’s Transaction Trends Update for Week 44 of 2020 showed debit card spend by credit union members rose 17% year-over-year. Transaction volume was up nearly 6%, marking 18 consecutive weeks of gains.
PULSE Perspective: Economic stress is likely contributing to the increase, as some consumers have been cut off from credit and others prefer debit during times of economic uncertainty. Debit’s resiliency as a generator of non-interest income makes your choice of a debit partner more important than ever.