CLEARWATER, Fla.-Credit unions must start devising strategies to increase debit interchange transactions.
That may be the only way to address lower interchange revenue which is coming down the pike, reminded Bob Hackney, president of CSCU. "Obviously, if your unit revenues go down then you want to generate more units to offset the reduction. That means increasing penetration, activation, and usage of debit cards."
While most credit unions are enjoying higher debit interchange than big banks thanks to the two-tiered system, Hackney-like many others in the industry-is watching for signs post-April 1 of payments networks reducing what they pay financial institutions. Institutions were to have chosen at least two qualified, unaffiliated networks for their debit cards by April 1. Concern is that once financial institutions have locked in their choices, networks may then begin cutting price in an effort to attract more merchant business.
Hackney pointed to a recent move by Visa to route PIN transactions over its signature rail. "This is something different. I think we have to see how it goes," he said, sharing concern that Visa may be making this move to gain more overall debit interchange volume to make up for lower prices. "Historically signature rates have always been higher. But I think we will eventually see parity between signature and PIN rates."
For info: http://www.cscu.net
