Consider a single PIN debit network strategy as a way to relieve downward pressure on interchange income. That comes from Stu Bloom, payments industry consultant, during a recent webinar hosted by Credit Union 24.
Bloom reviewed the Federal Reserve’s final interchange regulation’s main components:
In a single PIN debit network strategy, credit unions use one signature-debit network and one PIN-debit network, he says. And because few cards are registered to PIN networks, merchants must choose the only valid routing option—the one more profitable for your credit union. This way, your credit union is compliant and receives income.
Bloom advises credit unions to team up with debit networks that:
Additionally, credit unions may find an advantage in that most competitors (primarily banks) will be subject to the interchange fee cap, Bloom says.
Many larger institutions already are increasing fees to make up for lost income. Credit unions products and service will appear even more outstanding in comparison, he says.