By: Tom Pierce, Chief Marketing and Communications Officer, Velera

As consumers’ expectations change, payment preferences continue to evolve. Concerns about the current economic outlook and personal financial health are increasing – along with the demand for convenience, flexibility and security – all of which are influencing which payment methods are top of wallet and mind. 

Velera has released its seventh annual Eye on Payments study, which gauges the current state of payment preferences among credit union members and other financial institution customers (“non-members”), while exploring the factors that influence these trends. This research explores the various factors that influence consumers when it comes to choice and usage of different payment methods, as well as how different life stages and economic events affect those factors. Along with these insights, the study also suggests ways credit unions can optimize offerings to adapt to evolving preferences and needs to better serve their members — both now and in the future.

Here are some key findings from this year’s study:

A shift in consumer preferences has surfaced – credit ranks as the No. 1 preferred payment method, with debit trailing closely behind. Findings reveal that 37% of all consumers reported credit is their top preferred payment method, with a shift toward credit for certain types of purchases and situations — such as when making purchases at full-service restaurants, big-box retailers and fuel providers, buying tangible goods and for monthly subscriptions. 

• Takeaways: Given the increased popularity of credit cards, credit unions should focus on credit card product development, innovation and customization. Tailor rewards and incentives to your members, while also prioritizing digital issuance and mobile wallet integration — especially for younger, tech-savvy generations.

Card characteristics – from design to features and capabilities – are also influencing top-of-wallet decisions. Fifty-five percent of credit union members say that card design influences which card they choose to use. Rewards are also an important factor, along with the card being contactless and having a digital card option that can be saved to a mobile wallet. 

• Takeaways: Credit unions should focus on enhancing and diversifying card rewards offerings by reviewing and adjusting reward structures regularly in order to maintain attractiveness and relevance to your members.

Consumers continue to turn to digital payment options like mobile wallets. Fifty-nine percent of credit union members report they are likely to use a mobile wallet in the next six months. Members expect benefits such as ease of use, convenience and speed out of their payment methods — which mobile wallets deliver. 

• Takeaways: Credit unions should make sure members know that you offer mobile wallet technology, providing them the ability to transact and make purchases when and how they want. 

Safety and security are top of mind as fraud continues to rise. Eighty-three percent of credit union members are concerned about identity theft as fraud incidents increase. This emphasis on security could be a factor in the growing preference for paying with credit cards and mobile wallets due to the additional layers of security and tokenization. 

• Takeaways: Credit unions should educate members on current and trending fraud scams, arming them with the knowledge to stop fraudsters. Target generations with the same information, but delivered within the best channel for that audience — perhaps a TikTok video for younger generations and a printed mailer for older generations. 

Person-to-person (P2P) payment accounts – including Zelle, Venmo or Apple Pay – have staked their claim as a go-to payment method. The number of credit union members who reported using a P2P method as their primary payment method grew from 12% in 2023 to 25% in 2024. Six in 10 (62%) credit union members also reported they are likely to use a P2P option in the next six months to pay for goods and services. 

• Takeaways: Credit unions should prioritize investing in the integration of popular P2P services into their mobile banking platforms and payment solutions toolkit — this will help retain members and attract new ones, especially those in younger generations who are already utilizing these payment platforms.

Consumers continue to turn to newer payment offerings like Buy Now, Pay Later (BNPL), while expressing interest in trending options like cryptocurrency. Eight in 10 (82%) credit union members who know their financial institution offers a BNPL product have utilized it, up from 69% in 2022. Almost half of credit union members (49%) said they have used a BNPL program through an entity like Affirm or Afterpay. When looking at investment options, more credit union members have invested in cryptocurrency this year (39% in 2024, up from 24% in 2023). 

• Takeaways: There is interest and demand for BNPL programs and cryptocurrency investment opportunities, and consumers will seek them from another provider if your credit union does not offer them. Credit unions should continue to develop and expand their BNPL offerings, as well as implement targeted campaigns to ensure awareness. Credit unions should also provide information and education about cryptocurrency, positioning themselves as a trusted resource.

Credit unions play an important role in the financial lives of their members — 93% of members report they trust their financial institution and 87% believe credit unions are good places to get advice on financial matters. These are attributes that can and should be highlighted when credit unions look to recruit potential new members, while also retaining their current membership base. To stay competitive in a rapidly shifting payments environment, credit unions must focus on enhancing member experiences and investing in mobile and digital solutions. And credit unions do not have to do it alone — consider partnering with a credit union service organization (CUSO), like Velera, that can help expand and elevate your offerings. 

Delve into the key findings and takeaways that your credit union can leverage to effectively market to members and achieve continual growth and success. Download the full 2024 Eye on Payments study now.

In his role as SVP, Chief Marketing & Communications Officer, Tom Pierce is responsible for leading and executing Velera’s marketing and communications strategy, including brand development and sentiment, public relations, go-to-market strategy, market research and events. Pierce has successfully led marketing teams for more than 30 years, with the latter half of his career spent in the payments industry. Prior to joining Velera, Pierce served as Chief Marketing Officer for Cardtronics, the largest global ATM operator, and held senior marketing roles at FIS, Metavante and Wausau Financial Systems.