WEST PALM BEACH, Fla.-2012 will be remembered as a year in which credit unions received good and bad news about debit interchange.

Card processors and CUs (below $10 billion in assets) alike reported a slow but steady decline in per-swipe debit interchange levels since the Durbin rules took effect, many citing a drop between 6% and 10%. Good news is that transaction-driving strategies many credit unions put in place to counter the expected slide are working. A NAFCU study of its membership showed that 53.1% of credit unions surveyed reported an increase in monthly income from debit, indicating debit transactions are rising (CU Journal, Oct. 15).


A Shortfall

However the study also pointed out that gross revenue from the additional transactions is not covering the costs of processing the extra swipes. Industry analysts posited the shortfall is due to the fact per-swipe fees are down and that members are using their debit cards often for small-ticket items.

Jeff Russell, senior advisor for The Member's Group, Des Moines, Iowa, suggested credit unions begin including strategies to increase higher-ticket debit purchases.

Experts also suggested that CUs turn more toward credit card strategies to offset any debit shortfalls. Several CU CEOs told Credit Union Journal this year that they are looking more closely at credit cards for that very reason. One CU reported it was testing incentives to affect members' debit behavior (CU Journal, Sept. 10).


An Opposing View

Michael Moebs, however, offered an opposing viewpoint, that there should not be great concern over debit interchange. After analyzing Federal Reserve data, the economist and CEO at Moebs $ervices in Lake Bluff, Ill., said that by the close of 2013 financial institutions will make more in debit interchange ($21 billion) than they ever have (CU Journal, Oct. 15).

Also, an FIS survey late in the year (CU Journal, Nov. 12) indicated it may not take a great deal of effort on the part of financial institutions to persuade a sizeable portion of consumers-those using cash and checks a great deal-to swipe their debit card more often.

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