TAMPA, Fla.-There's too much at stake this year not to aggressively promote debit cards to members, asserts CSCU.
Barney Moore, senior portfolio consultant, reminded that virtually all credit unions have an advantage over big banks when it comes to debit interchange, noting that edge could be fleeting. "We are not sure how long this higher interchange rate will really last. Credit unions need to continue to institute strategies that get cards in more members' hands and generate greater activation and usage."
Moore believes all CUs under $10 billion in assets, which receive a higher interchange rate than FIs above that threshold, can offer a more competitive debit product, affording issuer-funded rewards. "I also think there is an opportunity to expand the use of debit for purchases below $10, when consumers often pull out cash."
On the other side of the cards business, Moore encouraged credit unions not to give up the positive momentum they've generated with credit.
"We have seen good credit card growth among CUs in the last couple years, and I expect to see similar growth ahead. Credit cards are the highest-yielding asset the credit union has, and properly managed it can be the highest-earning asset. Number one, the credit union has to have a strong issuer-funded rewards program supplemented with a merchant-funded network."
Preparing For EMV
Moore advised credit unions to begin preparing for EMV now, since implementation will take a great deal of time. "It will be a multi-year process, so credit unions have to mobilize now. At minimum they should begin the education process-start talking to card processors and service providers and begin forming a project team."
The executive added that getting involved in all aspects of mobile payments, such as P2P and mobile wallets, will keep the credit union at the forefront of members minds when it comes to mobile payments, and avoid them being left behind to play catch-up. "A very difficult thing to do in the mobile space."
For info: CSCU: www.cscu.net
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