Power Of The PIN

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FAIRHAVEN, Mass.-One CU believes that moving more debit transactions from PIN to signature will drive greater interchange revenue and has introduced a cash giveaway to get members to change their behavior.

First Citizens' FCU has just launched "Win Without The PIN," a debit promo that gives members more chances to win cash prizes when they use their debit card for a signature transaction.

"With all that is going on in the industry, this is not a bad time for the campaign," said Frank Almeida, VP of retail and marketing. "It's about what is in the best interest of the credit union and at the same time it benefits members. What we are doing is creating habits, getting people comfortable using debit under different circumstances, in ways they may have never considered before. This can help offset possible losses to revenue streams."

Via a drawing, the two-month campaign will award prizes of $100, $250, and $500 at the end of August. Each time members use their debit card for a signature transaction they get a chance to win. While chances grow each time the debit card is used, the prizes members can win are based on how many times they use their card. If they use it one to five times a month they can win $100, six to 12 times a month, $250, and more than 12 times makes them eligible for the $500 drawing.

"This really is a nominal investment to look at changing behaviors," said Almeida, who just days into the offer said it was too soon to gauge results.

Robust Debit Program

Good results are something the $535-million First Citizens' has been experiencing with debit over the last five years with total dollars and transactions both increasing on average 15% year over year. "We have a robust debit program," noted Almeida, who said the goal for this campaign is to increase signature-based debit transactions from 56% of total debit card transactions (current ratio) to 66% during July and August.

"This is not in any way an overreaction to Durbin," shared Almeida. "This campaign has been planned for a while. But if you push members to a certain type of behavior it becomes more top of mind after the promotion is over. We know there will be some fallback, but overall we expect to move the needle higher."

Almeida believes that now is a good time to create new debit card behaviors as the back-to-school and holiday shopping seasons are not far away. "Ultimately what we hope to do is move members up one bucket in their debit usage patterns. So those who don't use debit at all go to one to five times a month. Those who use it five times a month move to six to 12, and so on."

Win Without The PIN is being promoted in the CU's newsletter, on its website, in statement stuffers, on ATM screens, and will receive additional support, Almeida said. The pitch is: "What's better than getting Cash Back Rewards? Getting even more cash back."

That is a reference to the credit union's debit cash-back rewards program the CU intends to keep and not alter post Durbin-a strategy likely to run counter to many banks' practices and is in line with the thinking of one industry executive who sees keeping rewards as a strong marketing tool (see related story).

"We are member centric and are very hesitant to take things away from them," said Almeida. "Hopefully this separates us in the marketplace. So our first reaction to Durbin is can we grown our way out of these changes. We may have to work a little harder, but we think we can grow our business and be ready if we do in fact see a loss of interchange revenue from the new rules."

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