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Upgraded Cards, Upgraded Insights
By Joe Agostinelli, VP of Analytics and Insights, Vibrant Credit Union
Being the “top-of-wallet” card has been the goal of card issuers for as long as payment cards have been around. Although the goal is still the same, the rules of the game are changing with mobile wallets becoming more and more prevalent.
Vibrant Credit Union is new to the mobile wallet game. We are typically a fast-follower or leader in tech and innovation, but fell way behind in the card space. Up until November 2018, our cards were the most basic you could find. At that point, we made upgrades across the board, including EMV chips, slicker card design, introduced an aggressive rewards credit card, and signed on for acceptance with the mobile wallets: Apple, Google, and Samsung.
With a relatively smooth card conversion under our belts, Q1 2019 was the time to start looking at what new information all these changes were telling us from a data perspective. Mobile wallet was completely new to us so tracking down the data and figuring out what it is telling us has been one of our more immediate goals.
Although we don’t have a full grasp of the data, we can dig in to a certain level.
68% of our issued debit cards are “active” meaning they made at least one purchase in the past 30 days. Only about 3% of those active cards utilize one of the mobile wallet methods, but their overall debit usage is much higher, to the tune of 55.8 average purchases per month vs 32.7 for all other active debit users. Not surprisingly, those mobile wallet users are also much younger (32 years old vs 45 years old). They also have a much stronger relationship with us (3.2 products per household vs. 2.2 products per household).
There is a similar story on the credit card side, with mobile wallet users averaging 19.0 purchases per month vs. 8.2 for all other active credit card users.
I really believe getting our cards in the mobile wallets of our members is going to be one of the more “sticky” things we can do moving forward
Age disparity is similar: 36 years old for mobile wallet users vs 45 years old for all others. The credit card mobile wallet users have an even deeper relationship with us (driven mostly by having that CC in their wallet) at 4.2 products per household vs. the 2.2 average.
I’m not implying the mobile wallet is the driver for these additional products. More than likely, the already deep relationships allow for more engagement and quicker adoption of new services and offerings. However, I really believe getting our cards in the mobile wallets of our members is going to be one of the more “sticky” things we can do moving forward. And getting those deep relationships with our members is what will help us continue to grow and maintain a strong offering as opposition across financial services mounts.
What about the actual transactions?
Vending and Quick Serve Food are the top usage categories which obviously consist of lower dollar transactions. These two are followed by Grocery and Large Retailer categories. This isn’t a bad thing, but it speaks to where these mobile wallets are NOT being used at this point...airline travel, car rentals, warehouses possibly, and hotels.
Apple: Best in Class
From our data, Apple Pay is clearly the dominant player in the market at this point even though their phone market share in the US is fairly equal with Samsung.
Leveraging their established dominance in the mobile wallet space, Apple has upped the ante by offering their own credit card. Although it may not be even a strong competitor from a rewards perspective, their onboarding process and instant access to data around spend and other aspects of the card make it a very attractive product.
What does this all mean?
As we dig further into the data, I’m sure we will see some trends in shopper behaviors by device. Where do people with iPhones shop vs. Samsung? This may take a little while to vet out, but could lend to some cool insights down the road.
There are still several things that are going to drive transaction usage via the mobile wallet in the near future:
1. Consumer adoption and comfort with this method
2. Merchant acceptance continuing to grow
3. If possible, figuring out how to leverage this method for all types (especially higher dollar) purchases
We still have a lot of work to do as an organization to get our arms fully around this data, but being able to react so quickly out of the gate has allowed us to upgrade the knowledge we have about our members and how to better serve them moving forward.