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TALLAHASSEE, Fla.-The old CU adage that you can "make it up with volume" is actually true when it comes to debit revenue in 2011.

"That saying is somewhat of a standing joke within the industry, but this really is one of those cases when it applies," said Jim Park, president and CEO of CU24, about the threat to debit revenue from the new interchange rules.

While acknowledging the final rules have not been written and that some legislators are expressing concern about the proposed interchange guidelines, CUs must be prepared for the worst. To grow or maintain interchange revenue, Park believes new programs should be developed that require greater numbers of debit transactions, particularly when many members carry two and three debit cards in their wallet. "It means providing the right incentives to get them to move your card up in their wallet."

Internet PIN debit offers another avenue to drive up debit card usage, suggested Park. "Encourage members to use their debit card in conjunction with their home computer and purchase things on the Internet."

Checking fees will drive revenue growth this year, especially at banks, noted Park, who urged credit unions not to be too quick to eliminate free checking. Instead he encouraged CUs to move to tiered checking where members with deep relationships get the free product, while those who choose not to make the CU their PFI receive a fee. "There is a big opportunity this year to price your checking account properly and take checking business away from banks," Park said.

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