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Debit Transactions Surpass Credit, Check Transactions

WASHINGTON-Debit card transactions now exceed both credit cards and checks as the most popular form of payments in the U.S., according to a report issued last week by the Federal Reserve. The report provides an important backdrop to impending regulations on card interchange. The Fed report, which shows that electronic payments make up more than 75% of all transactions in the U.S., found that check usage continues to decline, but also that credit card transactions fell slightly between 2006 and 2009.

For 2009 there were 84.5 billion electronic transactions worth $40.7 trillion, compared to 24.4 billion check transactions worth $31.6 trillion, the Fed said. Electronic payments include debit cards, ACH, credit cards and prepaid cards. In the Fed's prior study on the 2003-2006 period, roughly two-thirds of payments were made electronically in 2006. Check payments declined the most in the latest study, by 7.2%, while credit card usage also declined, by 0.2%, and were eclipsed by debit cards as the most used non-cash instrument, the Fed said. Debit cards surged by 14.8% to 37.9 billion payments totaling $1.5 trillion.

 

Study Examines How New Rules Will Affect Debit

MADISON, Wis.-The Filene Research Institute has released a study that examines how federal regulation of interchange fees on debit card transactions will affect credit unions. Titled, "Interchange Regulation: Implications for Credit Unions," and written by Adam Levitin, associate professor at Georgetown University Law Center, the study offers analysis of how the Durbin Amendment to the Dodd-Frank Act will lessen the roughly $17-billion in debit interchange paid to issuing financial institutions every year.

Pointing to the increase in debit volume, the study said debit interchange accounts for between 4% and 5% of credit unions' gross revenue, while credit interchange is in the range of 1.5% to 2.5%. A 50% or greater decline in debit interchange revenue is possible for institutions larger than $10 billion, with 20 to 40 basis points (BPs) a realistic possibility--down from 75 to 125 BPs, the study suggests.

 

Suncoast Moving To CSCU

TAMPA, Fla.-Suncoast Schools FCU last week signed an agreement to process credit accounts, signature and PIN debit, and ATM accounts with Card Services for CUs (CSCU). "After extensive due diligence we determined the relationship with CSCU would provide the best one-stop-shop to manage all products associated with card services," said Jon Rasmussen, VP-card services for the $5.1-billion credit union. Clearwater, Fla..-based CSCU provides services for more than 3,000 credit unions.

 

Fynanz To Syndicate Resource Center

NEW YORK--Fynanz, a developer of customized private student lending solutions and provider of the cuStudentLoans.org private student loan marketplace, last week announced the release of a program to syndicate its College Resource Center (CRC) to its CU Partners. The CRC will enable those partners to quickly and easily integrate a resource for college planning within their own websites, the company said. The content includes expert insight on higher education, including how to plan college visits, school selection, choosing a major and navigating the college financing process. The content is developed and maintained by Ken O'Connor, a 10-year veteran of the financial aid industry and current Director of Student Advocacy at cuStudentLoans.org.

 

Visa To Expand Mobile Payments

SAN FRANCISCO-Visa is moving to make mobile payments a commercially available standard feature available for its partner financial institutions in the U.S.--including CUs. The move follows 18 months of development in trials in the U.S., Europe and Asia during which Visa tested commercialization of In2Pay microSD for use with smart phones. Credit unions that choose to deploy the technology will be able to provide members with a microSD card that can be inserted into the phone's existing memory slot to enable the device for payment.

 

CU Gives Away Christmas Trees

VANCOUVER, Wash.-Columbia CU here joined with two Boy Scout troops to give away 80 free Christmas trees. Columbia CU gave away 40 free trees each day over two days. The credit union also is holding a donation drive for the Vancouver branch of Share, a nonprofit for the hungry and homeless.

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