How to Engage Multicultural Consumers with #Payments Strategies

The variety of payment options available to today’s consumers creates a terrific opportunity for both FIs and consumers. FIs should continue developing a deeper understanding of multicultural consumers’ needs and behaviors to effectively reach new consumers. Payments, with their increasing emphasis on mobility and innovation, are a natural place to start.

By Miriam De Dios

Attracting and retaining a diverse consumer group is vital to any community financial institution’s (FI’s) long-term strategy. The Hispanic market in particular offers a plethora of opportunities. Today, one in six consumers is Hispanic. FIs who strive to understand and appeal to this growing demographic will be able to tap into their $1.3 trillion of annual purchasing power.

As CEO of TMG’s sister company Coopera, I am often searching for new opportunities to help our FI clients better serve the Hispanic market. I’ve found that payments products lend themselves well to serving a multicultural market. In honor of Hispanic Heritage Month, I’d like to share an excerpt from a recent blog post I wrote about trending payment options and their prevalence among the Hispanic population.

Debit Cards
The perception that “debit cards are dead” couldn’t be further from the truth among Hispanics. They are a prime target market for debit products. The preference for debit and prepaid cards applies whether Hispanics are banked, unbanked, native or foreign-born, Millennials or Generation Xers, consumers or business owners.

PayPal & Mobile Wallets
According to the TD Bank Checking Experience Index, Google Wallet, Pop Money, Venmo, PayPal, SquareCash and other services are important among Latinos. Nearly half of Latino respondents surveyed by the index indicated they used PayPal within the last three months to send money to peers, citing ease of use and convenience. These consumers also made 22 percent of all mobile payments in 2014 (16 percent of the U.S. consumer base today).

Prepaid Cards
According to the Federal Reserve, prepaid cards are the fastest growing form of non-cash payments. They are cost-effective, flexible and easy to use for consumers, governments and businesses. A lot of innovation exists from specialized providers more so than traditional financial institutions.