- Bryce Deeney, Co-Founder and CEO, equipifi
Looking to Nurture Your Member Relationships? Take Them Shopping
Guest editorial by Bryce Deeney, Co-Founder and CEO, equipifi
What do discount shopping events like Prime Day and Black Friday mean for credit unions? With the growing uptick in Buy Now Pay Later (BNPL), it means a lot.
Over the past few years, BNPL from third-party fintechs has gained massive adoption due to the financial flexibility it provides. In 2021, 56 percent of American adults used BNPL services. What’s more, some of these BNPL fintechs are looking to become serious players in the debit and credit card space, where financial institutions currently reside. Simply put, a consumer’s path from purchase-to-payment is shortening, and third-party fintechs are increasingly displacing financial institutions from the top of their members’ wallets.
So, what can credit unions do about it? Start taking your cardholders shopping.
Shopping Seasons Are Key for Cardholder Engagement
As the holidays near, bargain shoppers are preparing for annual discount shopping opportunities. The National Retail Federation projects that 46 percent of consumers will start holiday shopping before November 1st due to concerns around inflation, with 60 percent of shoppers doing so to “spread out my gift-shopping budget.”
The trend is clear: Consumers will need their credit unions more than ever this year to bring financial flexibility to their holiday shopping journeys. Consumers spreading out their shopping budgets over the course of several months is an anticipatory measure to make their purchases more affordable through installments. This is a key leading indicator of a rise in BNPL use this holiday season – a payment solution that your cardholders are currently receiving from multiple third-party providers, each with disparate repayment terms and little visibility into your members’ financial health.
For many consumers, making purchases and making payments are emotional events. Shopping brings delight as consumers acquire new products and find discounts, while paying for these items can be stressful. Being present for the positive moments and bringing relief during the stressful ones is key for credit unions to deepen engagement and reinforce their role as their members’ go-to financial partner. Members want their credit unions there, too. In fact, 70 percent of current BNPL users say they would be interested in using BNPL plans from their financial institution if such offerings were available.
A Better BNPL From Trusted Credit Unions
With inflation rising, member needs are shifting. Just this month, Amazon announced a second shopping season, named Prime Early Access, in response to consumers’ increasing demand for more discounts. eMarketer shows that this year’s Prime Day purchases included more everyday and household products like FritoLay variety packs and toilet paper. Credit unions should pay attention to this indicator of shifting member needs, especially as BNPL becomes a staple payment method for these shopping events. Because credit unions understand their members’ financial health and goals, they are best positioned to provide BNPL offers that empower their members’ financial wellness.
With each additional purchase paid for through third-party BNPL providers, members can become further removed from their relationship with their credit unions. As several major shopping seasons approach, credit unions are presented with the opportunity to incorporate BNPL into their payments suite and become their member’s single source for banking, shopping, and payment needs. When your members go shopping this season, will they have your BNPL offers top of mind?