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How Fee-Free Banking is Helping Amplify Usher in a New Era of Debit Card Customers

Lisa Larson, VP Payments and Operations, Amplify Credit Union

Lisa Larson, VP Payments and Operations, Amplify Credit Union

When you work in the payments space, many of your significant changes happen at the product level. New features and controls are designed to put more power in the hands of your customers – but not necessarily change the relationship between your organization and the member. At Amplify, though, we’re taking a more transformational approach, removing all bank fees to encourage a new level of trust and commitment from our debit card customers.

In February of this year, Amplify ushered in a new era of fee-free banking. Under this new model, no member will ever be charged a bank fee, regardless of their account balances or activities. In total, our team removed 40+ bank fees from circulation, returning over $2M in fees to our membership – a significant giveback for a credit union whose 2021 net income was $14M.

We launched fee-free banking for many reasons, not least of which was our desire to provide a more equitable banking experience for our members. But at its heart, our movement towards fee-free was in recognition of changing consumer behavior. The past few years have accelerated changes in how people use debit cards. To stand out in a crowded field of banks, credit unions, and neobanks, you must demonstrate to your customers that you both understand and anticipate their new needs.

For one, debit card utilization is skewing younger. According to a study by Mercator Advisory Group, consumers ages 18- 24 (81.1 percent) and 25-34 (75.7 percent) are most likely to use a debit card in their digital wallet. It makes sense that this would be our target audience; young adults grew up in the era of digital-first banking, and it is much easier for us to work with members whose behavior is already in-line with the tools and technology we are investing in as a financial institution.

"To stand out in a crowded field of banks, credit unions, and neobanks, you must demonstrate to your customers that you both understand and anticipate their new needs"

 Expanding our membership means having a product that meets those customers where they spend today. And frankly, the traditional models of account interest rates and bank fees did not reflect those spending habits. Study after study shows that more young adults are living paycheck-to-paycheck and getting hit with fees that are two, three times the total of older generations. So before making any changes to our card features, we had to address the underlying issue: what gives someone the confidence to transact with their debit cards without fear of penalties or overdrafts?

The early results are promising. Since we went fee-free in February, we’ve seen sustained growth in our month[1]over-month activation numbers with our new members. Our data has consistently shown best-in-class utilization from our existing members, but our analytics suggest that new members are adopting those usage rates, too. It speaks volumes about the Amplify brand that new business is just as sticky as second or third-generation customers.

And over the next few months, my team will focus on product refinements to improve our debit card experience. From working on new card designs with our Marketing team to introducing contactless and card control features to the cards themselves, we offer a holistic debit card experience to our members that cannot be beaten. Fee-free is a significant promise to our members, but it only gets them in the room. We still need to earn their business day-in and day-out with competitive products and digital services.

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