In June of 2020, we shared insights on changes in the payments landscape courtesy of COVID-19. The over arching themes of that article, also echoed by other industry players, have not changed. Trends showed a move away from contact payments (chip and cash) and toward digital payments (contactless, mobile, e-Transfer and IOP). In response, many financial institutions have accelerated their digital transformation plans. Interac Flash^® limits are increasing to $250 to compete with credit for the contactless transaction. More credit unions are going mobile. Over a period of 9 long months, the industry has seen change that typically takes years to gain market acceptance. A wise mentor once (or perhaps many times) suggested that ‘a trend is your friend’ – recent industry publications agree that the trend of movement to digital payments is likely here to stay for most consumers, even after our country is able to end this relationship and kick COVID-19 to the curb. Digital has graduated from acquaintance to friend.

So, what do the numbers from March to November tell us?

Cash is neither King, nor Queen. Pandemic figures are showing that not much has changed since the early months. While ATM use was up slightly for July through September, it’s clear that the second wave saw members step away from the ATM. Over the period of the pandemic, the volume of ATM withdrawals is down 38%, cash withdrawn is down 30%, but the average withdrawal is still up as compared to the same period in 2019. Other FIs are seeing a similar trend with 37% less transactions, 19% less dollars, but an increase in average withdrawal.

Online and in-apps is where it’s at! The need and desire to transact at a distance is continuing with Interac e-Transfer^®, Interac^® Online Payment (IOP) and mobile in-app volumes seeing the biggest growth. E-Transfer growth remains at 50%, IOP is holding strong at 130% and mobile in-app transaction volumes are up nearly 200%. In-app growth is likely to continue as an e-commerce payment method as Interac expects to onboard several high-profile merchants in the first half of 2021, including Walmart. Other FIs are also seeing changes – but on a slightly smaller scale. E-Transfer is up 17% and IOP by 79%. Mobile numbers are not available.

Use of debit has declined. With a shift to online and in-app purchasing, it’s no surprise that point-of-sale volumes have declined; however, the decline is not as sharp as was seen early in the pandemic. Debit card usage by credit union members is down 5% vs. 17%, but the dollars spent are trending upward with a 1.5% increase in spend vs. the 10% reduction that was seen for March through May. Interestingly, the volume changes seen by credit unions is not the same as the rest of the industry. Industry transaction and dollar volumes have decreased 12% and 2.5%, respectively, over the course of the pandemic.

Contactless spending is dominating debit. Contactless card and mobile transactions continue to dominate as the method most used to make purchases at the point-of-sale. Pandemic figures show contactless transactions are up by 65% for credit union members compared to 59% for the industry, but only 34% of the dollars spent. Higher dollar volumes with chip are not unexpected, as limits imposed on Interac Flash transactions with traditional debit cards force the member to complete $100+ transactions via chip or mobile. As credit unions move to high limits for Interac Flash^® and more members transition to mobile, we expect to see shifts in amounts to be more in line with the number of transactions.

*Services under the CUCC Interac membership include debit and ATMs for Co-operative Node credit unions, e-Transfer and IOP.

---