ARLINGTON, Va.-Analysts have plenty of suggestions for debit strategies post-Durbin.
* Jeff Russell, senior advisor at The Members Group, said that If transaction-driving strategies are not enough to counter per-swipe revenue reductions, it's time to look at ways to add fees to checking without making them seem like fees.
"At some point in time many more credit unions will need to add fee sets to checking, I have been saying that for a while," said Russell. "Credit unions have to look at how they create a set of bundled services that really don't look like a fee."
Before taking that step, Russell advised CUs to look at whether their debit transaction strategies are producing too many small-ticket purchases. If so, CUs must include tactics that increase the number of higher-ticket swipes, such as for gas or groceries.
"The small-ticket transactions are important. You want your members always using your card, as that drives loyalty. But you may need some promotions that drive larger purchases," said Russell.
* Michael Moebs, economist and CEO at Moebs $ervices, Lake Bluff, Ill., reminded that savings come through efficiencies, encouraging more debit users to take efficient checking accounts that require e-statements, ACH, and home banking. "And just drive more usage of the debit card-from those who have the card and get more cards in the hands of members who don't. That does a positive double-whammy to the bottom line, you get more debit transactions and you eliminate usage of paper checks."
* Bill Lehman, VP of portfolio consulting for CSCU, Tampa, Fla., said CUs need to pay more attention to the number of payment networks on their debit cards. He believes many simply looked at the April 1, 2012, deadline to have two unaffiliated PIN networks on their cards to see if they were in compliance and then moved on, leaving more than two networks on their card. "That gives merchants too many options to route transactions through the lowest-cost network. We are instructing credit unions to make sure they are in the right networks that offer the highest interchange and to limit the number of networks to two."
* NAFCU President Fred Becker added, "Fee income is going to go down, bottom line. So don't spend a lot of time flustering about how it will get there. Spend time thinking about how you will reinvent your business model to meet changes that could occur rapidly over the next three to five years. Credit unions will have to take a very careful look at their costs structures, take advantage of partnering with other credit unions through CUSOs, and move more things online."