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Contactless debit mobile use aim to attract members
BOSTON (9/8/09)--Attracting new members, especially younger ones, remains a critical challenge for more than half of credit unions, says a recent study. As a result, some credit unions are altering their marketing strategies and testing products such as contactless debit cards and mobile banking services. More than 55% of credit unions have trouble attracting new members, according to a report by Boston-based Aite Group LLC. They are testing innovative products in hopes of attracting Gen Y consumers--the 76 million consumers ages 29 to 33 (ATM & Debit News Sept. 3). In January, PSCU Financial Services, a credit union service organization (CUSO), launched its contactless debit card a week after it announced it would resell mobile-banking services to its member credit unions. More credit unions may choose to convert to contactless debit cards now that huge merchants such as Best Buy and Home Depot accept their payments, Ron Silvia, PSCU director of debit and ATM product services, told the publication. Like PIN-debit, contactless cards have started out slow because of the investment. But once the return on the investment is realized, merchants seem to be moving swiftly to them, said Silvia. Gen Yers would like contactless payments because they like instant gratification. When they check out, they want to do so fast, Silvia said. CO-OP Financial Services recently signed partnership agreements to promote mobile banking--something that is popular with Gen Yers--to the credit unions it serves. CO-OP told ATM & Debit News that credit union services need to be more relevant--credit unions can't be the parents' credit union and stay relevant to the Gen Yers. CO-OP is also piloting contactless debit card products with two credit unions and has the infrastructure to process such transactions, said Kim Hester, CO-OP Financial executive vice president of network services. According to Aite, credit unions studied say they are increasing their social networking marketing through Facebook and Twitter to attract new members. Eighteen percent of credit unions surveyed said using social networking was a high priority, while 32% said they were considering it.


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