We believe that when members of Randolph- Brooks Federal Credit Union (RBFCU) use their CashBack Rewards Mastercard® credit card, they’ve got a payment card that’s the best in its class. It’s best in class because the benefits are straight across the board. There are no gimmicks to get that 2% cashback. You get it from every purchase, and that’s what sets it apart.
Since the launch of our CashBack Rewards card, there is a 301% increase in outstanding balances and a 161% increase in the acquisition.
Yet payment cards are quickly changing. We are seeing new players in the market. Even though nobody in our general area was offering a 2% cashback card at the timeRBFCU launched this member giveback, the things that are happening in payments now make it challenging to keep up and stay relevant. This mainly comes from two areas.
The nontraditional players, the Fintechs, make up one of the areas where it’s challenging. They are good at getting things to market very quickly. They don’t have to go through some of the challenges that a lot of institutions have with resources. They have that capability to jump on an idea right away.
So as this one set of challenges moves along, we wonder, and we make comparisons, to remain sure our 2% remains relevant. We see we’re still ahead of the majority of the players.
Now we move to the next set of challenges. It’s an area where new players have made the experience so good that I sometimes think consumers don’t care as much about the rest of the product.
We’re doing our 2% credit card, and that’s just as good as the new Apple Card. But that experience with the Apple Card - I was floored when I looked at it.
Yes, you can get that Titanium Card. But that’s not what they’re leading with. They’re driving toward that digital experience.
At RBFCU, we see how our members respond positively as we work to enhance the digital experience with payment cards. A strong indication of our members’ readiness was clear when our Manage Cards program came online in August 2017. As we enabled our members to set commands with their cards through our online banking platform and mobile app, rather than requiring them to call in, we saw an increase of almost 80% in card-management categories during 2017-2018. In 2018-19 it was up 145%.
The importance of digital experience adjusts our thinking. We’ve been looking at whether we go ahead and move to contactless transactions. Cost is a consideration in this area. But, importantly, when you look at switching from chip to dual interface where you have both contactless and the chip, it makes me wonder that, if we’re trying to push a digital environment, does it make sense to go to contactless or does it make sense to just skip straight to digital and push that channel?
Whatever decision we make, we need our card on top of that digital wallet, and we have to encourage people to use it.
Our latest program follows that path. In a move that has been introduced through our Freedom Debit Card, members can receive a replacement card, or their first card issued from us, instantly through digital channels. Members can add it to their mobile wallet or get the card details to make e-commerce purchases immediately.
Digital Instant Issuance is a real help to the member. We are seeing the card details being accessed more than 9,000 times per month, and it’s only been since late June 2019 when RBFCU launched the program for members.
It’s incredible how quickly they adapt to digital improvements.
That’s part of our shift to emphasize the experience, the feel our members have during the use of their card. It needs to be able to catch people’s eye. The cashback rate is excellent, it is, but everyone is looking for an experience.
We showed we could change the front-end piece to where our members look at it, and we know they have that feeling of “wow.” It is tough for anyone to replicate Apple, yet there are things we can do. That’s our aim now.