With the rise of new payment methods such as mobile wallets and P2P, I often get asked about the future of credit and debit cards. The truth is, cards aren’t going away any time soon. However, you’re going to see a lot less of them.

As buyers’ habits have shifted from in-person to online purchases, fewer shoppers are pulling a piece of plastic out of their leather wallets. Just as importantly, as the role of these cards shifts from the traditional swipe or dip to loading and saving on a merchant’s website or in a digital wallet, the decision of which card to use will no longer be made at the point of purchase – it will have been made long before.

As cardholders’ behaviors evolve, card-not-present transactions are gaining a larger piece of the pie. In fact, according to Worldpay customer data that analyzed more than 800,000 merchant locations with $1 trillion in annual sales volume across 25 billion annual transactions, CNP transactions now make up over 7 percent of sales transaction volume for credit union-issued cards. This represents growth of 7 percent over just the past year.

However, that same data revealed national banks are doing even better. With year-over-year growth of 12 percent, CNP transactions now represent nearly 9 percent of total sales transaction volume for national bank-issued cards.

Drilling down further to recurring transaction activity—a subset of CNP transactions—the song remains the same. Credit unions experienced robust 65 percent growth between 2016 and 2017. Yet national banks saw 80 percent growth over the same period, according to our data. This difference allowed national banks to pick up market share in this channel, and they now have nearly three-quarters of recurring card transaction volume.

All this begs the question: what can your credit union do to compete for CNP and recurring payment transaction activity?

  1. Go after consumers between the ages of 30 and 50: Our research finds that cardholders in the 30- to 50-year-old, affluent market segment lead the charge in CNP. More specifically, highly educated professionals in this age range who have kids at home spend a large portion of their disposable income online on goods like electronics, media and clothing, and they’re moving online at an accelerating rate. However, the typical credit union member skews a bit older than this segment – and older than the typical cardholder at a national bank. Credit unions need to put a larger focus on acquiring cardholders within this high-potential demographic.
  2. Engage your current cardholders: Although credit union cardholders skew a bit older, they also have higher income, on average, compared with those of national banks. Credit unions should do all they can to retain and grow these relationships. One way to do this is through loyalty and rewards programs focused on set-and-spend, recurring shopping activity.
  3. Encourage recurring and card-on-file payments: Some of the most dynamic areas in CNP growth include the grocery pick-up, food delivery and pharmacy merchant segments. With the growing popularity of subscription-based home food delivery services, as well as online ordering from fast food and fast casual family dining establishments, you should incentivize your cardholders to load their card in their user profiles when they sign up for these services.

The beauty of technology is that it constantly evolves and has the power to impact massive shifts in industries like finance. As a financial leader, you can lean into these changes and evolve your business strategies and the way you interact with your cardholders. Don’t let that market share slip away.