A recent survey showed that credit unions and their members are looking for different things from their credit cards. In fact, 76% credit union card goals were aimed toward growth, while the rest prioritized member services. But here’s the rub: 100% of members polled listed “false declines” as their number one service issue for credit cards.
Clearly, there’s a disconnect between member experience and credit union card goals. Growth is a good end goal but making sure existing cardholders feel taken care of is paramount for retention. There is nothing more frustrating to a member than a false decline in the middle of a busy day.
Why Card Declines are a Problem
Speaking from personal experience, I know how frustrating a false decline is. Recently, an old friend came through town. We caught up over drinks and because we were on my home turf, I offered to pick up the tab. My card was declined.
It worked out in the end. I pulled out a different card and paid with that. Nevertheless, it was surprising and a little bit embarrassing.
Imagine if I had been out to dinner with a new prospect or client. A hiccup as small as a false decline could have signaled that we weren’t ready or able to take on their business.
False positives on credit cards can be as high as 90%. I’ve held my fair share of cards over the years, and I relegated any credit card that couldn’t consistently function properly to the back of my wallet. Credit union card goals should include reducing false positives to better align with member needs. If you want your credit card to be top of wallet – focusing attention on reducing false positives is as important as your rewards programs.
The Road to Redemption
An unused credit card in the back of a member’s wallet costs a credit union money, reputation, and relationship trust. Unfortunately, many credit unions aren’t sure how to address false declines, because they want to maintain security and reduce the risk of fraud.
Reassessing your credit card processor could be your best move. In your RFPs and vendor research, pay attention to false positive decline rates. Also, you can group issuers and acquirers together to see both sides of transactions. Strong data analytics and machine learning can aid in reducing these kinds of problems.
Another option is to try a pilot with Flexpay to help find and tune your fraud prevention. Matching up your transaction history with Flexpay’s merchant history will enable you to reduce fraud and improve the member experience. Best of all, it’s a pilot – so there isn’t any cost!
In an Ideal World…
Nobody should have to rifle through their wallet to find a card that won’t mistakenly decline purchases. Or worse, nobody should be left without a way to pay because of an inadequate processor.
Credit union card goals should align with member credit card needs. Members need credit union credit cards that they can trust. Problem-free credit card processing reflects well on the credit union and its sophistication, which will increase their confidence in other available services.
The best part of reducing false positive decline rates is that it will inspire member confidence in their credit cards, which will aid growth and reduce attrition.
There are two ways you can give members what they want: first, you can ask your card processor to prioritize false positive declines. Second, you can join our effort to connect merchant data and credit union data via machine learning. Together, we can reduce fraud risk while maximizing member approval.
Are you interested in trying a pilot with Flexpay? Fill out the form below today!