How to Build a Top-of-Wallet Card Experience for Holiday Spend

Banks and credit unions are bracing for a shopping season unlike any other. With ecommerce sales dominating and with consumers continuing to shift from credit to debit transactions, card issuers can position themselves to benefit by providing a modern card portfolio incorporating several key features.

It’s beginning to look a lot like… well, like nothing we’ve ever seen before. With Christmas less than two months away we’re well into the season of commerce. While shopping officially kicks off with Black Friday, the uptick in purchases begins as early as October, with at least 20% of consumers previously beginning their sprees as Fall begins, according to a Facebook study. This year we are already seeing and expecting more of two continuing trends: an increase in online and contactless spend and a transition from credit to debit usage.

With many physical retail stores still shuttered or operating at reduced capacity, consumer access is extremely limited. Gone are the days when hundreds of people would rush a store for the two remaining Tickle Me Elmo’s, Furby’s, or Nintendo Switches on the shelf. Even if hundreds chose to attend in person, the lines would be out the door for many more hours than Black Fridays of the past, as stores continue to enforce 6-feet of social distancing.

Combined with the impending flu season, precautionary actions to avoid COVID-19 transmission has many individuals doing the majority of their shopping from the comfort of their homes.

Retailers are acutely aware of this in 2020. Recognizing the need to reduce the number of people in a store at one time and the desire of consumers to begin shopping earlier, promotional sales began earlier and are being spaced apart to allow non-stop consumer excitement for the coming months.

Amazon originally pushed off Prime Day, which typically occurs in July, due to the pandemic. The tech and ecommerce giant rescheduled the online event for Oct. 13 and 14 — jump-starting holiday shopping online. In 2019, Amazon said it sold over 175 million products on Prime Day — more than Black Friday and Cyber Monday sales combined. By launching Prime Day in October, Amazon has the ability to impact consumer expectations and spending patterns for the entire season.

However, other retailers aren’t sitting idly by while Amazon runs the show. They are jumping in full force with companies like Walmart releasing planned deals early, Target emulating Prime Day with their own same-days sales, and almost all stores offering multiple ways to shop throughout the entire season — in-store, online, curbside pick-up, pre-orders, and same-day deliveries.

Big Shift in How Consumers Pay

It isn’t just the timing and location that’s different in 2020 — it’s also the way consumers are spending. Pandemic life has meant the tightening of the purse strings for many American families. While reduced spending is part of the equation, how Americans are spending is among the biggest changes. Cash is no longer king (in fact, Newsweek reports many retailers have put a hiatus on accepting dollars and coins) and credit cards bring with them the fear of debt accumulation.

Earlier this year Business Insider highlighted Visa’s SEC filings, showing a 21% reduction in credit card spend, but a 12% increase in debit card spend, year over year. An expected $100 billion dollars is expected to shift from credit to debit on an annual basis.

What Does This Mean for Issuers?

Card offerings can make all the difference in retaining cardholder spend and maintaining top-of-wallet position during the holiday season and beyond. Consumers make card choices based on a variety of reasons — from rewards to loyalty to available funds. The decision to use one card over another is a complex equation of numerous factors. Now, more than ever, a part of the equation is the card experience. How easy it is to access the card, how much control they have over the card, and the level of insight into spending are all part of a more robust journey.

Banks and credit unions can impact this part of the decision by providing a modern card portfolio that offer the features that give cardholders this experience.

Earn Your Way to Top-of-Wallet Status

Being top-of-wallet for digital wallets means that you are the default card. And since 84% of digital transactions are made with the default card, according to Deloitte, that’s a lot of spend you want to be a part of!

Becoming the default card requires a strategy, including:

  • Offer immediate digital access to new cards.
  • Enable push-to-wallet capabilities so cardholders can easily add your card to their pay wallet of choice.
  • Make any rewards or offers clear from the start so the value is obvious.

Provide Clarity Around Spending

Debit spend is increasing because consumers are cautious about their financial futures. Spend clarity is one way that financial providers can instill confidence and remain a trusted partner. Mastercard refers to the impossible-to-understand transaction descriptions some issuers use as “gobbledygook,” but whatever you call them, they don’t provide the insight needed.

Transaction enrichment cleans up spending and provides valuable data on each transaction — a real merchant name, location, logo, and even contact information in case there are questions regarding the purchase. By providing this level of detail, the issuer can fulfill two major needs.

  1. The consumer receives confidence in each transaction and a better understanding of overall spend — it’s easy to see which merchants and store types are being frequented.
  2. The issuer reduces reports of friendly fraud — both decreasing inbound call volume and the overwhelming cost of unnecessary chargebacks.

Offer The Ability to Generate One-Time Card Numbers

One of the reasons card holders previously leaned on credit cards was the simplicity of shopping online and dealing with fraud should it occur. With debit, concerns of fraud are escalated since the dollars are directly removed from one’s liquid assets. While online purchases have become more secure in recent years, fraudsters are forever evolving and consumers need to be confident that an online purchase won’t result in a drained bank account.

Help provide your account holders with this security by giving them the ability to generate one-time card numbers for each online purchase — making it easy for them to shop confidently online and easy for you to retain that trusted status.

Simplify Self Service

When was the last time you bragged about how much time you spent on hold with your bank? If your mind is turning up blank, that’s because no one enjoys calling their financial institution to make a request. With customer service times increasing by hours during some months of 2020, consumers need a better way to make simple changes.

If, by some miracle, you do make it to the store just in time to hook that final Nintendo Switch, you definitely don’t want to get held up on the phone with your bank as they try to validate the purchase or provide you with a confirmation number to push your card to your digital wallet.

Instead, turn such situations into moments of delight for your cardholders by giving them access to in-app card controls. Basic functions include applying for an account, reporting a card lost or stolen, receiving a new card instantaneously, providing push-to-wallet capabilities for contactless spend, and setting controls and alerts.

Offer Digital-First for Credit and Debit

The features of a digital-first card are essential, but they are also necessary for credit and debit. With the release of the Apple Card in 2019, the world was wowed by the easy application experience and simplified interface. But the Apple Card is just one credit card and today’s consumers want to be able to choose not only who they bank with, but which card they use. Providing a modern card experience for both debit and credit is essential in meeting cardholders needs.

At the end of the day, and the beginning of the holiday spend spree, it’s all about confidence. Each of us just wants to be reminded that our banking partner is there for us in the moments that matter and know that we can spend with confidence.

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