ENGLEWOOD, Colo. - The search for additional ways of generating non-interest income has more credit unions turning to instant-issue debit cards this year, reports Dynamic Card Solutions, which expects the slow economy to continue the trend in the second half of 2008.
“Our first-quarter sales are up 34% this year over the same time last year,” pointed out Ron Zanotti, VP for Dynamic Card Solutions here, a provider of instant issuance and PIN selection solutions.
It’s a “clear sign,” Zanotti said, that credit unions are facing lending pressure and looking for solutions to increase their non-interest-bearing revenue stream.
“If you can increase the amount of card usage by your membership, obviously that non-interest-bearing revenue increases as well,” offered Zanotti. “With instant issue you get the plastic to members sooner, they start using it more quickly, and you can educate them on the spot as to why they should use the card instead of checks or cash. It’s a huge advantage because it increases service levels as well.”
The influx of deposits is also driving instant issuance, Zanotti contends. “A lot of customers are pulling their money out of the big banks because of all the negative publicity and putting them into smaller financials. So credit unions are pretty flush with cash now. With lending down, credit unions are investing in products and services that will generate revenue–like instant issuance.”
Zanotti predicted that credit unions’ strong standing in the community will lead them through the current economic difficulties. “The small community financials are the good guys,” Zanotti said. “They didn’t get into the subprime mortgages that crippled a lot of large financial institutions.”
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