DES MOINES, Iowa-With pressure on overdraft and interchange revenue streams only likely to increase, credit unions will have to think creatively to maintain non-interest income.
That is advice from Jeff Russell, senior advisor for The Members Group, who pointed out that forecasts call for CU debit interchange to eventually drop seven to 18 basis points, and that the Consumer Financial Protection Bureau is now making noise about regulating overdraft.
Throw into the mix merchants' continuing efforts to drive down interchange, and Russell emphasized the importance now of credit unions thinking out-of-the-box to expand the non-interest pie. "Creativity is essential because pressure on existing forms of non-interest income will only become greater."
Reminding that merchants do not like paying interchange from a card swipe and are trying to find ways around that, Russell stressed how payments could quickly evolve. "For the future we see more value in the transaction stream coming before and after the swipe. This is the idea that I can work with merchants to present the credit union's members with a discount. That begins to drive incremental sales for the merchant, who then afterward sees the results and is then willing to still pay the same amount per transaction."
For info: www.themembersgroup.com.
