For consumers around the world, debit cards have long been a mainstay of the payments experience. But have you ever considered how this basic banking staple could help you drive growth?
From novel concept to global conquest
When debit cards debuted in the 1970s, the concept of paying directly from your bank account was nothing short of revolutionary. But at the time, banks were prioritizing investment in electronic transfers, ATMs and credit cards – services they felt were
more competitive.
By the 1990s, though, the world had caught on to debit cards, which now soared in popularity alongside the global adoption of interconnected ATM networks. And even in the 2020s, their use has continued to increase.
The pandemic was a major factor in this latter-day growth spurt, as contactless payments became the norm. In 2020, debit card transactions leapt by nearly €1 billion (21.7%) year on year in Germany and accounted for 79% of all retail purchases in the Netherlands.
Debit card payment volumes increased by more than 20% in the U.S. and the U.K., too.
[1]
From Baby Boomers to Gen Zers
Given their omnipresence, it’s easy to take debit cards for granted and see them as just another mandatory banking service. But what if they could help you win over a new generation of customers?
For continued growth, it’s increasingly critical that banks boost their appeal to a younger audience – not only Millennials but also Generation Z.
By 2030, Gen Z’s income is set to grow 400% to $33 trillion and will account for more than a quarter of global earnings.[2]
And behind these big numbers lies a golden opportunity for banks.
As the first digital natives, Gen Zers are low users of credit but have high expectations of the banking experience. Now’s your chance to exceed these standards with a next-generation debit card strategy.
From old school to digital
The question is, are your services in sync with Gen Z’s requirements?
Be honest with yourself. 88% of bank managers say they understand the needs of Gen Z account holders. But only 34% of those customers would agree.[3]
Then there are the age-old problems of legacy technology. Disparate tools, disjointed data and unconnected interfaces can easily blunt your appeal to your digital-savvy target market and make you even less relevant.
It’s time for a modern debit strategy, in three steps.
1. Understand the risks and opportunities
Get actionable insights for debit card management by delivering real-time data on debit activity and portfolio profitability and gaining a consolidated view of your customers.
2. Engage with customers as they want you to
Elevate the customer experience by offering innovative but intuitive self-service tools for managing individual debit needs and controlling where, on what and how much a card is used.
3. Evolve your working environment
Provide an open ecosystem and single, comprehensive user interface for multiple activities, including debit, ATM, fraud, reports and card processing, as well as APIs and data tools.
From background service to growth channel
So, if you’re looking to add value with your services and grow your banking business, modernizing your debit card strategy is a great place to start.
But it’s not all about boosting your appeal to younger consumers with shiny new technology. It’s a matter of making long-term improvements to your services, your processes and your every customer interaction.
With a modern, digitally-driven approach to debit, you could delight the next generation of customers and keep your current customers happy, too.
Who knew the humble debit card could be such a powerful vehicle of sustainable growth?
[1]
ReThink Quarterly, How debit cards changed our lives, 2022
[2]
GfK, A fresh look at Gen Z and Millennials, February 2023
[3]
IBM, How banks can cater to Gen Z customers, December 2022
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- Source: https://www.finextra.com/blogposting/25557/make-debit-cards-add-up-for-your-bank?utm_medium=rssfinextra&utm_source=finextrablogs
