CHARLOTTE, N.C.-Carolina Postal CU is giving members a "Dime Every Time" they swipe their debit card over 12 times a month, significantly increasing signature debit transaction volume and revenue.
"For the past year-and-a half, we have been trying to get members to increase their use of signature debit and it has worked very well," said Deb McLean, VP of marketing and business development. "Every time members swipe and sign over 12 times each month they get 10 cents. I do it and I average about $1.50 to $4 a month."
McLean said the promotion indicates that a credit union can make up for a loss in debit revenue by increasing transaction volume. CPCU in 2010, while paying the extra money to members, increased signature transactions 22% over 2009, generating $364,000 in additional revenue. In 2011, the program has debit swipes up 17% over 2010.
"It works, you can get your members to use their debit card more," said McLean. "You can pass on more money to your members and the credit union can make money too."
McLean admitted that some members of the credit union's board and management team had reservations about the program's payoff in the early going. "We did not see a lot of movement at first when we looked at numbers from month to month. But then, when we looked at it over a year's time, we saw we really moved the needle."
The $81-million credit union calculated that it needed to get an average of eight signature transactions a month per debit card holder to break even. McLean said signature transactions "shot up," but not without some member education. CPCU explained to members that they needed to let merchants know they want to pay with credit, not debit. Advertising says, "Dime Every Time! Get paid to use your CPCU debit card. Hit credit not debit and sign for your dime."
McLean knows that if interchange revenue declines eventually due to the Durbin rules, the credit union will have to evaluate the offer and possibly make adjustments. "We are keeping our eye on the program. But it has definitely been a good decision for us and showed the credit union we can make more money on debit even though we are giving more back to members."
