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CU System
CO-OP CUs should convert ACH to debit
RANCHO CUCAMONGA, Calif. (4/4/08)--In a tight economy, credit unions should convert their cash, check and automated clearinghouse transactions to debit transactions to increase revenue, says James Hanisch of CO-OP Financial Services. Credit unions can earn revenues on interchange fees when a transaction is made. “Generally, there is no interchange income to credit unions on cash or check transactions,” Hanisch said. He is executive vice president of network operations and chief administration officer with CO-OP. Debit transactions, both signature and personal identification number-based, earn revenue. The amount depends on the merchant, but the range is “realistically 25 cents to 40 cents on average” per transaction, he said. “CO-OP for many years has encouraged credit unions to market to their members the benefits of using debit cards,” he said. Credit unions looking to convert their transactions to debit will have to invest in marketing and behavior change for their members. “They should encourage their members to pull cards instead of cash,” he said. Cash still accounts for roughly one-third of all transactions, Hanisch said. Any transaction with income is better than a transaction that doesn’t generate income, he concluded.
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