CHICAGO-Discover Financial Services plans to introduce a new quarterly survey offering insights into credit union members' spending habits and confidence levels.
According to Kevin J. O'Donnell, VP-Credit Issuance with Discover Network, credit unions will be able to use the data to help "enhance member loyalty" and provide insights into future member spending intentions.
Discover is preparing to roll-out the first credit union-issued Discover-brand cards, which will be cobraded with the issuing CUs' brands.
As part of its program, Discover is offering a number of tools it says dovetail with the CU mission of wise consumer finance. Those tools include its Spend Analyzer and its Purchase Analyzer. Pricing on the cards will be determined by the individual issuer.
The Discover brand at this point is not one most associate with CUs, which predominantly issue Visa and MasterCard-branded cards. O'Donnell said the company recognizes that, and sees it as a plus.
"We think some of our competitors are oversaturated and we are under-penetrated," said O'Donnell. "We think credit unions are a great opportunity. They are different from commercial banks and play a vital role in reaching out to consumers and offering consumer education."
For CUs that issue on the Discover Network, O'Donnell said the company will provide analytics of trends and behavior on an aggregate level.
While many members may lack a core understanding of how their credit union works, O'Donnell emphasized that members nonetheless feel a strong affinity toward their CU, with the strongest affiinity felt by those who carry plastic cards from the credit union.
Ironic Behavior
And yet the irony is just 29% of members have a credit card issued by their CU. "That's a striking data point and a big opportunity to use credit cards to drive loyalty," he said. "It's a huge opportunity that's largely untapped."
One feature the Discover credit card offers is called "Cash Over," which allows the member to get a cash advance when making a credit purchase, as they can on when using a debit card.
O'Donnell pointed to research from Javelin Strategy that found "no annual fee" remains the primary motivation among consumers in choosing a card, followed by online account management tools, good customer service, flexible reward and APR.
O'Donnell said Discover also sees a larger opportunity for credit unions in prepaid cards. "If a credit union isn't in it, it should be considered," he said. "Credit unions are already doing a good job of providing open network gift cards, but I think there is more of an opportunity in reloadable cards-although we still need to se what the regulations are going to be."
