There are signs that credit union members — and the nation as a whole — may be starting to turn the corner after a rough few months in the wake of the coronavirus.
Data from Visa shows total U.S. payment volumes declined at a slightly lower pace in May than during the previous two months, which could be a sign of increased consumer spending, said Chuck Fagan, CEO of PSCU, the nation’s largest credit union service organization. Fagan’s remarks came during a keynote address on Tuesday at the CUSO’s annual Member Forum, being held digitally this year due to the pandemic.
Fagan said PSCU’s own data supports those trends, and at the end of May the company had seen six consecutive weeks of continuous improvements in credit card transactions, while debit remained at or above historic growth levels during that same period. Despite stay-at-home orders being lifted in many states, card-not-present transactions and sales volumes continue to grow for both credit and debit, while ATM cash withdrawals have been down 20% or more for 11 consecutive weeks.
“Despite clear signs of a rebound, some aspects of the credit union business model could be changed forever,” Fagan said Tuesday, emphasizing that now more than ever, “digital strategy has to be a key priority” for CUs.
The pandemic could force credit unions to adapt. Fagan noted that prior to COVID-19, half of low-dollar transactions at the point of sale were still conducted with cash, but “with heightened concerns around physical contact … contactless cards are now receiving an accelerated focus from consumers.”
He cited a recent survey from Mastercard that found 51% of U.S. consumers now use some form of contactless payment — whether card-based or with a digital wallet — and said “that perception of safety and convenience have led nearly one-third of U.S. respondents to switch out their top-of-wallet card for a contactless card.”
On top of the pandemic, recent weeks have also seen the nation gripped by a level of civil unrest not seen since the late 1960s, and Fagan added to the chorus of credit union leaders addressing increased calls for social justice.
“As we look to return to whatever the new normal is going to be following the pandemic, I encourage all of us to strive for a better normal — normal of acceptance, inclusion and open conversation,” he said. “A normal in which … all people can live without fear because of the color of their skin.”
This Friday marks Juneteenth, and while some banks have announced plans to close early in honor of the holiday, credit unions do not appear to have followed their lead. Still, Fagan said this year the holiday “holds more importance than ever,” and he told members of the black community within the credit union movement, “We see you, you matter and you’re valued; racism has no place in our industry.”
