Over the last five years, use of checks has declined, cash has remained stable and ACH, debit and credit cards have continued to grow. In 2024, ACH, debit and credit accounted for 77% of payments.
In China, mobile payments using Alipay and WeChat Pay account for 80% of transactions.
The difference is who provides the service. In the USA, it is a financial institution, while in China it is an internet company. What would happen here if 80% of transactions did not flow through traditional channels?
Of course, that would mean lost revenue, lost data and more opportunities for competitors. But maybe the biggest problem would be lost member attention.
Credit unions need to think about wallet share but also mind share. If I use QuickBooks for accounting, Wise for international transfers, Apple Pay for retail transactions, PayPal for domestic transfers, Bill.com for sending invoices, Schwab for investing and my credit union for direct deposit and my credit card, then my credit union is getting a small proportion of my financial time and attention.
When it is time for me to buy a car, the company that has most of my financial attention will often get the first chance to make the loan.
Credit unions need to think about becoming a one-stop shop for digital financial activity. Today, people have to split their time among so many solutions to manage their financial lives that the credit union does not have the mind share it should.
By the way, we have a great new podcast called Future Banking, available on all major podcast hosting sites.