In Ireland, credit unions are speeding up the launch of their electronic payment alternatives and working with Visa and MasterCard to offer debit cards to compete more aggressively with local banks.
Following trends longer held in the United States, Irish credit unions are just starting to emerge as significant competitors to the region's banks. Credit unions are striking while rival banks are losing popularity with consumers, especially given recent headlines about higher fees imposed by banks like
"CUSOP, on behalf of the credit union movement, is developing an electronic payments solution for members of credit unions," says Kevin O'Donovan, the group's CEO. "The strategy is about bringing the movement's payment technology into the 21st century to provide cost-effective electronic services and online facilities."
When it comes to payments innovation, Irish credit unions are decidedly behind their American counterparts. Until the last couple of years, fewer than one in 10 credit unions that are enrolled in the Irish League of Credit Unions had the ability to offer electronic funds transfer, and just 5% provided their members with debit cards, according to the ILCU. Instead, the credit unions have long stuck to checks, which are rapidly losing popularity in Europe since the rollout of the Single European Payments Area (SEPA) started easing the way for electronic payments. CUSOP connected its first credit union to the European Clearing System in February 2014.
There are 508 credit unions in Ireland, according to the ILCU. By the end of this year, at least 75 Irish credit unions expect to provide electronic payment options to their members, with the plan that at least half of the country's credit unions will have electronic payments up and running by the end of 2015.
While O'Donovan maintains his credit union affiliates have "no desire to become banks or indeed 'compete' with banks," he does predict that offering more advanced payments services will help attract new members. According to recent research conducted by CUSOP, 47% of 18 to 34 year olds would consider a credit union for their loans, which they mainly need to buy a car, pay for college, or go on vacations. The survey also found unsurprisingly that the vast majority of this age group (91%) regard online banking and mobile banking as a prerequisite for joining credit unions.
"The credit union movement needed to introduce electronic payment services and other facilities for current member and to attract new members, particularly young people," O'Donovan says.
