3 Payment Problems That Signal It's Time to Modernize Your Credit Union's Payments Strategy
Let’s be honest:
running a credit union has never been more complex. Rising delinquencies,
higher costs and slower growth are squeezing margins across the industry.
According to NCUA data, the average return on assets rose slightly
to 0.76% through the second quarter of 2025, up from 0.69% a year earlier,
while non-interest expenses climbed 6.8% to $72.4 billion during the same
period. That leaves very little room for inefficiency—especially in payments,
one of the most operationally intensive—and most intensive—parts of your
business.
But here’s the thing: the biggest drag on profitability isn’t just the economic headwinds—it’s outdated payment systems. When members can’t pay easily, delinquencies spike, call centers get flooded and staff waste hours fixing errors that modern technology can prevent.
What’s worse, your members have a poor payment experience that leads to frustration and lost trust.
If any of these scenarios sound familiar, it’s time to take a closer look at your payment infrastructure. These three payment problems are warning signs that your credit union’s payments strategy is due for a serious update.
Payments Problem #1: Outdated payment options are
frustrating members and driving up costs
Members today live in a
multi-wallet world. They use debit cards, ACH, PayPal, Venmo—even cash. But too
many credit unions still limit how and where members can pay. That disconnect
leads to frustration, missed payments and a rise in delinquency that could have
been avoided.
Executives we’ve spoken with
describe their payment systems as “stuck in the seventies.” While others pay an
estimated $8 on payment-related calls just to process a
transaction manually.
That’s not sustainable—and
it’s not the experience members expect.
The solution: Address payment friction through a comprehensive payments strategy that adapts to member preferences. Upgrade to a unified platform that accepts every major payment type and channel—ACH, cards, PayPal, Venmo, Cash App Pay, Apple Pay, Google Pay and even digitized cash at retail. When members can pay anytime, anywhere, your staff spends less time chasing payments and more time strengthening relationships.
Pro Tip: Start small. Implement personalized, one-click payment technology to dramatically reduce manual phone-based collection efforts. We’ve seen clients reduce agent-assisted payments by 43% within one year of implementing Smart Link technology.
Payments Problem #2: Poor payment experiences are contributing to a rise in delinquencies.
Not every delinquency signals financial distress. In many cases, members are trying to pay—but your system gets in the way. Maybe an ACH initiated on Friday doesn’t clear until Tuesday, causing a missed due date. Or maybe a failed card payment never prompts a retry.
The solution: Invest in a platform that prevents payment failures before they happen. For example:
● Real-time
alerts when a payment fails, giving members a chance to pay instantly with
another method.
● Intelligent
payment cascading that automatically retries alternate funding sources.
● Partial
and rescheduled payment options to help members stay in good standing when
times are tight.
When good members can make good on their intentions, you reduce delinquency and protect relationships that took years to build.
Payments Problem #3: Limited payments infrastructure is blocking access to cash-dependent and rural markets.
Credit unions are
mission-driven to serve all members,
yet many lack the infrastructure to reach the ones who need them most. Service
workers, gig economy earners, and rural residents often live miles from a
branch. In other words, the communities that could most benefit from credit
union membership often can't access your services. This isn’t necessarily
because they don't qualify, but because your payments infrastructure doesn't align
with how they live and work. This mismatch between your capabilities and market
needs is leaving growth opportunities on the table.
The
solution: Modernize your payments infrastructure to
meet members where they already are. With the right retail cash payment
network, members can make loan or deposit payments at local stores during
evenings and weekends—no branch needed.
Pro
tip: Position these capabilities as part of your
inclusion strategy. Expanding access to cash payments through retail networks
isn’t just convenient—it fulfills your cooperative mission while opening doors
to new members and deposits.
From Payment Problems to Payment Progress
The pressures facing credit
unions today—shrinking margins, rising costs, fintech competition—aren’t going
away. But they are manageable if you tackle the root cause: payment friction.
Modernizing your payments
strategy isn’t about keeping up with fintechs; it’s about delivering the
frictionless, flexible experience your members already expect. Because when
payments are simple, fast, and reliable, members engage more often, stay
longer, and help your credit union grow stronger.
In other words: better for members, better for growth.
About the Author
Alisha Stair is Sales Manager at
PayNearMe, where she partners with credit u...