Today’s credit unions are in the crosshairs of a changing payments landscape.
Competition from fintechs, big banks, payment apps, and neo banks is fierce. Many of these digitally-native providers can offer superior virtual experiences, and they view payments as a natural gateway to capturing the entire customer relationship.
Meanwhile, member expectations are evolving rapidly, as financial consumers demand anywhere/anytime access to their preferred payment channels, and grow increasingly concerned about fraud and security. That’s why more than a third (37%) of credit union leaders do not believe their current payment offerings are sufficient to meet member needs.
Complicating the situation further, financial and payment behaviors and preferences vary widely by generation. For example, Gen X, the generation that includes those born between 1965 and 1980, are the most frequent users of ATMs. Baby Boomers (those born between 1946 and 1964) have the highest propensity to use the branch for personalized service.
The youngest generations, including Millennials (born between 1981 and 1996) and Gen Z (born between 1997 and 2012) check “all of the above.” Although they tend to be more digitally-savvy than their older counterparts, they have stated in surveys that they want all channel options available to them, even if they use them only rarely. This is of particular concern for credit unions, as Gen Z and Millennials exhibit the highest risk of switching from their current financial provider, according to Deloitte’s 2025 Consumer Banking Survey.
With this as backdrop, it’s time for credit unions to reassess how they can best meet so many diverse needs, to ensure they maintain primary relationship status with members of all generations.
Offer your members choice
In her role as Vice President of Payment Systems, Cristobel von Walstrom oversees the Card Services, Bill Pay, and Electronic Services departments at Wescom Financial. She joined Wescom in May 2025, following a distinguished career leading strategic payment initiatives at financial services organizations including MasterCard, American Express, Synchrony, and Fiserv.
Von Walstrom likes to say her experience working at Fortune 1000 firms has offered a “bird’s eye view” of the changing payments landscape. This enables her to see the unique opportunities credit unions have to serve a consumer base demanding personalized, curated payment experiences.
According to von Walstrom, credit unions should strive to find the balance in their product development strategy between making a strong business case and doing what’s best for the member.
An example of this members-first approach is using peer-to-peer payment solutions such as Zelle® as a “loss-leader” to capture more of a member’s wallet share.
“It’s important to offer your members choice,” von Walstrom says. “However the member wants to pay, you need to enable that. Zelle® can cannibalize your other payment methods, like ACH or credit or debit cards. But it’s a critical service that meets members’ increasing expectations of convenience and immediacy.”
Von Walstrom cites instant card issuance as another way to meet members’ needs for convenience and immediate access to their preferred forms of payment. For the member, in-branch instant issuance solutions reduce friction, as they eliminate the need to wait to receive a new physical card in the mail. For the Credit Union, this often results in higher activation and usage rates, helping to offset expenses and paying off in long-term loyalty and relationship growth.
Segment to personalize
According to von Walstrom, before rolling out a slew of new payment products, credit unions should implement a segmentation strategy to identify and categorize the specific needs of their membership.
To begin, she recommends conducting a deep analysis of your membership based on critical factors including payment behavior, demographics, transactional history, personal preferences, geography, and relationship.
Next, use this data to create a series of key member personas. She recommends keeping it to no more than six or seven archetypes (e.g., “young professional,” “traveler,” “empty nester,” etc.).
Once you’ve identified these unique personas, the next step is to develop a product roadmap that includes specific solutions customized for the needs of each unique archetype. “If you’re going to try and segment, you need more than one product,” von Walstrom advises.
According to von Walstrom, such customized products may include credit cards designed for young professionals, travelers, those that prefer cash back, specific affinity groups (such as college alumni, or members of a trade group or union), a “no rewards” card for budget-conscious households, and a secured card for new borrowers.
For example, Wescom Financial offers a variety of credit card products targeting different member personas. They offer a MyRewards Visa® Credit Card for regular spenders who desire high-value rewards, and a rewards-free Active Visa Credit Card for those who desire a lower rate. Wescom also offers a Bruin Edge Visa Credit Card for UCLA alumni, faculty/staff, students, and fans and a Knott’s Visa Credit Card for fans and associates of the Knott’s Berry Farm theme park. Knott’s Visa cardholders receive 5% back for every dollar spent on Knott’s Berry Farm tickets and season passes, along with exclusive access to theme park events.
This segmentation strategy also applies to offering members the ability to apply for and access credit through the channels they prefer.
“Some members want to apply online, some want to come into the branch, and some people want to call,” von Walstrom says. “You have to have not just choice of products, but also choice of how to obtain them.”
Understand needs to retain top of wallet status
According to Visa, a payment method achieves “top of wallet” status when it captures a member’s spending across a dozen or more merchant categories.
Although this seems like a high bar, von Walstrom says it is achievable through the implementation of robust, targeted rewards programs that offer higher rewards within certain categories of spending. The key is to present relevant, timely offers to the right cardholders at the right time, and to do it in the most frictionless way possible.
To succeed in a new, evolving financial landscape, credit unions must embrace what they do best: serving the needs of their members. It starts by taking a “yes, and” approach to payments. Offer your members the right complement of payment products, channels, and access that meets them where they are today.
Note: Wescom Financial is Insured by NCUA. Select Knott’s venue purchases may be eligible to earn 5 points per dollar spent at select merchants with the Knott’s Visa. Visit wescom.org/knottscardbenefits for a list of eligible merchants. Terms and conditions apply. Zelle® and the Zelle® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.