CLEARWATER, Fla.-The improving economy, a debit advantage virtually all CUs have, and the opportunity to attract younger members are three key factors that, when combined, should lead to a solid second half for credit unions, according to CSCU.
Barney Moore, senior portfolio consultant, emphasized that younger consumers are the biggest debit users.
"Younger consumers have exhibited a strong preference for debit," said Moore, seguing into the natural advantage all CUs under $10 billion have now. "They enjoy a significant competitive advantage over the regulated institutions under the Durbin Amendment. There has been a lot of negative press about the Durbin rules, but, in fact, because virtually all CUs enjoy a higher interchange rate than the big institutions, their debit programs can be stronger-they can afford to do more things, like rewards."
Moore, too, said to go after cash and check users with debit promos. "This is really an educational play-just a concerted effort to let members know the benefits of debit over checks and cash, such as convenient payment."
Business debit is a large opportunity Moore is not sure CUs are taking advantage of. "For a [Durbin] regulated issuer, business debit is a losing proposition. But for the non-regulated [under $10 billion in assets] this is a great revenue generator. Business debit interchange is well above what it is for consumer debit."
