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Recurring Card Payments: A Strategy for Loyalty in Today’s Competitive Banking Landscape
As both digital expectations and competition rises, recurring card payments offer a simple yet powerful tool for financial institutions to secure consistent cash flow, reduce friction and deepen customer and member engagement.
Today’s consumers demand seamless, mobile-first experiences, whether it is paying a loan, funding an account or managing their bills and subscriptions. While many community institutions are investing heavily in technologies like digital wallets, instant payments and AI-driven personalization, one powerful tool that often goes underappreciated and underutilized: recurring card payments.
With activities like the recent holiday shopping season driving a burst of increased card usage, it is imperative community FIs ensure their cards remain top of wallet. Beyond convenience, recurring card payments deliver measurable behavioral, operational and competitive advantages that can both reshape engagement models and strengthen loyalty with accountholders.
Why Recurring Card Payments Matter Now
Industry data suggests card payments have been consistently more favored than other traditional methods like ACH and checks do to their ease of use and instant authorization. This is especially true for recurring obligations like loans and subscriptions. The Federal Reserve’s 2025 “Diary of Consumer Payment Choice” report showed that both checks and ACH accounted for only 14% or less each of all consumer payments in 2024, with credit and debit cards accounting for 35% and 30% of payments each (or a combined 60+% of all noncash payments). This data also suggested that of all cash payments, nearly two-thirds were made by consumers who prefer cards.
For banks and credit unions, recurring card payments offer three critical benefits:
- Consistent Cash Flow
Automated card payments reduce missed transactions and late fees, creating predictable revenue streams. This stability is especially valuable in an uncertain economy, where delinquency rates have spiked – subprime auto loan delinquencies recently reached their highest level since the early 1990s. By locking in recurring payments, institutions can mitigate risk and maintain portfolio health. - Operational Efficiency
Manual collections and follow-up efforts are costly in both time and resources. Recurring card payments minimize these burdens by simplifying the payment journey. Banks and credit unions can redirect staff from reactive collections to proactive engagement strategies, turning servicing from a cost center into a loyalty-building asset. - Predictable Engagement Rhythm
Recurring payments create a steady cadence of interaction between accountholders and their financial institution. This rhythm not only fosters trust but also opens the door for personalized offers, and organic cross-selling and retention initiatives. Payment metadata can offer tailored communication, deepening those relationships and further enhancing wallet share.
Behavioral Advantages: Meeting Modern Consumer Expectations
As with all their digital interactions, today’s consumers expect both simplicity and speed from their banking providers. With billing and subscriptions, they want to set up autopay once and forget about it, confident their payments will be made on time with no oversight. Recurring card payments provide exactly this by delivering the same frictionless digital experience they have in other areas of their lives (which also helps to further secure and drive loyalty).
Research has consistently shown that digital convenience is a cited as a top reason consumers may open new accounts or switch financial institutions. Many credit unions, in particular, face mounting pressure to modernize their payment offerings to attract younger generations, who prioritize mobile-first solutions and seamless onboarding and transactions. By enabling recurring card payments, community FIs can meet these expectations head-on, positioning themselves as both tech-savvy and member-/customer-focused.
Operational and Compliance Considerations
While the user benefits alone are substantial, institutions must navigate a host of regulatory nuances related to those card programs. For example, card brand rules prohibit convenience fees on recurring debit card payments, which is a common compliance pitfall for many organizations that fail to adjust their systems accordingly. Understanding these requirements and implementing proper controls is essential to avoid penalties while protecting accountholder trust.
Additionally, fraud prevention remains a top concern and priority. As payment technologies advance, so too do the tactics and tools of the bad actors. Banks and credit unions should pair recurring payment capabilities with strong authentication measures and real-time monitoring to best safeguard all transactions.
Driving Loyalty Through the Digital Experience
Recurring card payments are more than a back-office efficiency play – they are a strategic lever for loyalty. In an increasingly crowded marketplace of competing mega-banks and non-bank fintechs, community institutions must differentiate through better understanding and meeting the needs of their customers and members, and the experience they can offer them. Providing intuitive, automated payment options signals both innovation and reliability, reinforcing those relationships at every touchpoint.
About Author:
Amanda Licona-Crocker is president of SWIVEL, an SWBC Company and leading fintech specializing in integrated solutions.