6 Top-of-Wallet Tactics for Credit Unions

Long gone are the days when competitive interest rates or fun card designs were enough to win “most-favored card” status among members. Today, in order to keep and optimize members’ card relationships – and the interchange that comes with them – credit union issuers have to do more to make their cards “top of wallet.”

But dramatic shifts in consumer shopping habits have moved the goalposts. Top of wallet used to refer solely to the physical location of a member’s favorite plastic card in his or her actual, tangible wallet – now the term is also about whether members are linking their cards to their Amazon accounts, Starbucks cards, mobile wallets, and the myriad of other merchant and service provider accounts people now use to make purchases every day.

There are still ways credit union card issuers can claw their way to top-of-wallet status, though. Here are six tactics that industry experts said can help credit unions stand on the summit of today’s thoroughly modern wallets.

1. Remind, remind, remind. Getting to top of wallet means being top of mind. Thoughtful, effective, post-issue card campaigns are a huge part of making that happen, and those campaigns should include instructions on how members can attach a credit union’s credit or debit cards to popular online accounts.

“It’s a huge benefit if you can get in that space,” PSCU Advisors Plus Consulting Principal Barney Moore said. “Amazon, Uber, Starbucks, you name them – where there’s a lot of repeat purchase activity it’s really important to show them how to do that, because sometimes they don’t know. And if you can get them engaged, they’re going to be more active and they’re less likely to [leave] … once that card gets in there, it’s hard to move it.”

A good time to get that information in front of members is when they log into their credit union accounts online, he noted. Social media and email campaigns are other good ways to get the word out.

Offline messaging can be effective, too. For example, when credit unions mail out new credit or debit cards, the envelopes typically only contain the cards, some legal disclosures and the activation instructions, noted Lou Grilli, who is assistant vice president of product development and thought leadership at the Tampa, Fla.-based CUSO Trellance. “Where was any easy-to-understand reason why I should make this card top of wallet – why I should use this card and not toss it in a drawer?” he asked. Credit unions could also use those envelopes as opportunities and insert reminders or instructions on how to attach a card to merchant accounts or mobile wallets, he said.

2. Reward attachment. For many card issuers, the real top-of-wallet test comes down to a few highly lucrative minutes when a member creates an account with a merchant and has to decide which credit or debit card to attach to it for current and future purchases. Those cards tend to stay attached to the accounts for a long time. Credit unions need to provide compelling reasons their cards are worthy of that role, Grilli said.

“Credit unions need to encourage through reward programs to enter your card into Apple Pay, Samsung Pay, Google Pay, Walmart Pay, Uber, Lyft, Amazon’s 1-Click ordering – all of them,” Grilli said.

Offering special rewards for using a card at least three times on an online payment platform also works, he said. “Most likely at that point it is the default card and the reward is in there to change behavior,” he explained. “As more things move to online and mobile, you need to encourage that behavior as well.”

3. Emphasize security. “It’s table stakes now for [members] to feel like their card is as safe as it can possibly be,” Bill Hampton, SVP and head of issuer solutions at Worldpay, said.

What’s more, credit unions have to be able to replace members’ cards at lightning speed if and when a merchant data breach occurs, he said.

“When they’re dealing with a credit union, they think they’re dealing with their hometown financial institution and they chose them for that reason,” he explained. “They’re going to expect that card coming back sooner and they’re going to expect more help.”

4. Don’t hang your hat on card interest rates. “We highly discourage credit unions from leading with rates,” Grilli advised. “While that may cause a small bump in new [credit card] activation, that’s isn’t a good long-term strategy. The strategy needs to be the reputation of the credit union the security and safety of using their card; annual fee comes into play and the rewards programs … leading with rates does not get you to top of wallet.”

5. Offer more breathing room. “A lot of credit unions are very conservative when they first put out a promotion with a new credit card offering or first sign up a member for a credit card,” Grilli explained. “There are some credit unions that do not go back on a regular basis and look at those credit lines.”

That’s a problem, because nearly one-third of members stop using a card when they bump up against a credit line, he noted. Raising credit lines can propel cards to top-of-wallet status by prompting members to attach them to bigger-ticket accounts. “Granting credit line increases – [it’s a] perfect way for credit unions to reach out to say, ‘Hey, we believe in you. We value you as a member. We’re going to give you more opportunity to use your card,’” he said.

6. Dial down the call center involvement. Requiring members to contact the call center can hinder top-of-wallet efforts by jeopardizing a credit union’s shot at getting a member to attach a card to an account. “It could be considered a deterrent,” Grilli said. Fraud mitigation is a reasonable motivation for the authentication requirement, but many big card issuers are doing that now via texted passcodes, he said.

“Some issuers still have not upgraded to the text message version and therefore still rely on the call center for validation,” Grilli added.

If a credit union is still requiring members to stop what they’re doing and pick up the phone, be sure the encounter is quick and automated, he warned. That can even work to the credit union’s advantage if the call center reminds members about the rewards and benefits of linking their cards to their other online accounts, he said.