Most credit unions underuse cards and merchant services. Here’s how AI, the right partners, and a member-centric strategy can turn them into a growth engine.
Credit card spend in the U.S. has crossed trillions of dollars annually, and a growing share of that volume now runs through digital channels and small-business commerce platforms. For credit unions, that’s both a risk and a huge missed opportunity if members’ card use and merchant services live somewhere else.
Here’s the thing about credit unions and payments: most of the member relationship now happens where the card or the API touches the transaction. If you’re not in that flow, you’re slowly becoming a utility provider instead of a primary financial partner.
This post builds on insights from Matt Good of Elan Credit Card and connects them to a bigger theme in this series: AI for credit unions and member-centric banking. We’ll look at how smart partnerships, AI-driven operations, and community-focused strategy can turn credit cards and merchant services into a growth engine instead of a compliance headache.
Why card and merchant services strategy is now an AI problem
The core shift is simple: payments are now data businesses, and AI is what turns that data into better member experiences and better risk management.
When a credit union offers credit cards and merchant services on its own, leaders run into three big challenges:
- Credit and fraud risk on increasingly complex transactions
- Compliance risk across changing regulations, especially in digital payments
- Technology expectations from members used to instant, personalized, mobile-first experiences
Providers like Elan step in to remove credit and compliance risk and provide modern credit card solutions. But that’s only half the story. The other half is how AI can help your credit union stay member-centric while relying on partners.
An AI-aware payments strategy should:
- Use transaction data to predict needs and personalize offers
- Detect fraud and credit risk in real time, not after the fact
- Surface insights about local small-business ecosystems
- Automate routine service so your staff can focus on relationships
Most credit unions don’t have the budget to build all of this in-house. That’s where the right partner structure—and a clear AI roadmap—actually matter more than the brand on the plastic.
Turning small-business partnerships into a community growth engine
Matt Good emphasized a point many credit unions underestimate: your small-business members want an all-in-one financial partner, not five vendors who don’t talk to each other.
What small businesses actually want from their CU
When you talk to local owners—restaurants, trades, online sellers—you hear the same list repeatedly:
- A business credit card that fits how they spend
- Merchant services for in-store and online payments
- Simple reporting that ties into accounting
- Clear, responsive support when something breaks
Here’s where AI for credit unions can change the game:
- Smart underwriting for business cards using alternative and behavioral data
- AI-enhanced cash flow insights based on card and merchant data ("Your weekend revenue is trending up 18%; consider adjusting your line")
- Automated reconciliation suggestions that plug into their accounting tools
When your card program is supported by a partner like Elan that takes on risk and operations, your internal team is free to focus on:
- Understanding local segments (contractors, non-profits, niche retail)
- Packaging offers that match their rhythms
- Providing consultative, human guidance instead of chasing paperwork
The result: your credit union becomes the central hub for how money moves in your community—not just one more logo in their wallet.
AI-driven credit card programs: from risk-free income to member-first design
Matt’s pitch is straightforward: Elan removes credit and compliance risk and pays credit unions risk-free income on card programs. That’s attractive, especially for smaller institutions. But income alone shouldn’t be the only lens.
If you want a truly member-centric credit card strategy, you need to connect three layers:
- Risk & compliance (partner-driven)
- Experience & personalization (AI-driven)
- Community impact (credit union-driven)
Where AI fits in a partner-led card program
Even when a third party holds the risk, your credit union still owns the relationship. AI tools can:
- Flag life events from spending patterns (new baby, move, job change) to trigger timely outreach
- Personalize communications around rewards, promos, and financial wellness based on member behavior
- Identify at-risk members before they attrit, using patterns like declining card use or channel switching
Here’s a practical model I’ve seen work:
- Use the partner’s data feeds and reporting as your raw material
- Layer on your own AI analytics (or a vendor) to create member-level insights
- Turn those into targeted outreach via your contact center, digital banking, and branch staff
You don’t need a data science lab to start. Even basic clustering (spenders, revolvers, transactors, inactive) plus a few rules-based campaigns can boost:
- Card activation rates
- Spend per active account
- Member satisfaction with digital experiences
Questions to ask a credit card partner about AI
If you’re evaluating or renegotiating a program, don’t just ask about rates and rewards. Ask:
- What AI or advanced analytics are you already running on our portfolio?
- How do you share those insights back with us, and in what format?
- Can we co-create member journeys (e.g., fraud alerts, limit increases, balance transfer offers) based on our own strategy?
- How are you using AI to reduce fraud, false positives, and member friction?
If a partner can’t give clear answers, you’re likely leaving value—and member trust—on the table.
Merchant services: choosing a partner that supports AI-first member service
Matt also talks about something that often sits in the background: merchant services. For many credit unions, this is an afterthought: a vendor referral, a brochure at the branch, maybe a landing page.
That’s a mistake.
Merchant services are where your small-business members feel daily pain: chargebacks, outages, confusing fees, and inconsistent support. If you can solve that well, and wrap AI-driven insight around it, you earn loyalty you can’t buy with rate specials.
What “affordable and multifaceted” should actually mean
When Matt describes an “affordable and multifaceted solution,” here’s how that translates in practice for a member-centric, AI-aware credit union:
- Transparent pricing with clear tiers and no gotchas
- Omni-channel acceptance: in-store, mobile, online, recurring
- Rich data feeds about transactions that you can use (with consent) for insights
- Support experience that feels like your credit union, not a random 800 number
From an AI standpoint, the right merchant services setup lets you:
- Spot seasonality and trends in your local economy (e.g., holiday spikes, event impacts)
- Offer data-driven advice to businesses ("Your Tuesday evenings are underperforming similar businesses by 12%")
- Detect unusual patterns that could indicate fraud or operational issues
Best practices for choosing a merchant services partner
Matt highlights the importance of best practices and key considerations for a successful partnership. Here’s a short checklist tailored to AI-focused credit unions:
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Data ownership and access
- Who owns the transaction data?
- Can you access it via APIs or exports for your analytics tools?
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Brand and service alignment
- Will your members feel like they’re dealing with you or a faceless gateway provider?
- How are issues escalated and resolved?
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AI and analytics capabilities
- Does the partner offer dashboards and insights for your business members?
- Are there basic predictive tools (e.g., revenue forecasts, churn risk)?
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Integration with your digital banking
- Can merchant data appear inside your business digital banking experience?
- Does the partner support single sign-on or a unified experience?
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Community and charitable alignment
- Does the partner participate in community outreach or charitable giving alongside you?
- Are there programs that tie card and merchant volume to local causes?
If a partner can support those five areas, they’re not just a vendor—they’re helping you build a defensible, member-centric ecosystem.
Community impact, charitable giving, and the AI narrative
One of Matt Good’s core messages: the “people helping people” mantra is real, and members notice when credit unions live it—or ignore it.
Community impact isn’t separate from your AI strategy; it’s how you keep the technology from feeling cold and transactional.
Here’s how to connect community, payments, and AI for credit unions:
- Use card and merchant data (aggregated and anonymized) to identify local needs—for example, neighborhoods where small-business revenue is lagging
- Tie card programs to local charities so every swipe supports visible causes
- Highlight impact dashboards in your annual meeting and digital channels: dollars donated, local businesses supported, volunteer hours
This matters because:
- Younger members care about values alignment as much as rates
- Businesses want to be associated with institutions that show up locally
- Your employees feel more connected when they see the community outcomes of the products they sell
AI can help you measure and communicate this impact clearly, but it can’t replace the decision to invest real dollars and time in your community. That choice is still human.
Where credit unions should start in 2026 planning
If you’re looking at your 2026 strategic plan and wondering where to begin, here’s a practical sequence I’d recommend:
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Audit your current card and merchant services stack
- What’s member NPS or satisfaction around disputes, fraud, and support?
- How many small-business members use your merchant services vs outside providers?
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Clarify your AI ambition
- Are you aiming for basic analytics, or do you want predictive and personalized experiences?
- Which member problems are you trying to solve first?
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Engage current or potential partners with sharper questions
- How do you support AI for credit unions beyond buzzwords?
- What data and tools do you give us to be more member-centric?
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Pilot one or two member-centric AI use cases
- Example: smart outreach campaign for under-utilized cardholders
- Example: basic cash-flow insight reports for small-business merchant clients
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Tie it back to community and brand
- Build at least one program where card or merchant activity feeds a visible local impact initiative.
The reality? You don’t need to build your own credit card platform, fraud engine, or merchant gateway to win. You do need a clear point of view on how AI, payments partners, and community impact fit together.
Credit unions that get this right will own the member relationship even as the payments world keeps shifting. Those that don’t will watch more spend, more small-business relationships, and eventually more primary checking accounts migrate elsewhere.
If your card and merchant services strategy doesn’t yet feel like a core part of your member-centric AI roadmap, this is the year to change that.