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More members use cash back at POS
TALLAHASSEE, Fla. (4/21/10)--U.S. credit-union-member behavior has evolved since 2009, with 63% of respondents citing that their members’ of point-of-sale (POS) use has increased since then, according to a new survey. Credit Union 24 conducted the survey in February at the Credit Union National Association’ Governmental Affairs Conference.
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Thirty-seven percent of respondents said that POS usage has remained steady since 2009, and 0% of respondents cited that POS use has decreased among their membership (see Figure No. 1). Use of POS for cash-back among credit unions members is also on the incline, with a large majority (89%) of credit union leaders citing that up to 40% of their membership uses POS for cash-back. Why is POS for cash-back increasing? “More and more merchants accept POS transactions [for cash-back]--fast-food restaurants, service stations and the like,” Jim Gowan, Credit Union 24 executive vice president and chief operating officer, told News Now. “People are just using debit cards more. The economic downturn helped cause that. But also with POS, members can track expenses more through online banking and can budget better.” Yet while POS use is increasing, ATM use appears to be gradually slowing down, with 7% of credit union leaders citing that their members’ use of ATMs has decreased since 2009. Only 50% cited an increase in ATM use over 2009 (see Figure No. 2).
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“The younger generation now is using debit cards like cash---the way my kids do,” Gowan said. “The debit transactions have been outpacing credit card transactions. Debit card use is growing faster at POS versus signature debit transactions, though both are going up. Also, debit card use has outpaced credit card use for several years. “Traditionally, lots of credit unions encourage members to use signature debit over Personal Identification Number (PIN) debit because the interchange was higher,” he added. “But PIN is safer than signature because of fraud, so credit unions should note that. POS is a good opportunity to increase income for credit unions.” Also, by changing member behavior so they get cash back at POS, credit unions receive money on the interchange fee from the transaction, but eliminate the ATM charge they would have to pay out, Gowan said. “So it’s a good double whammy because there’s no expense for the credit union,” he added. Credit Union 24 is a member-owned, full-service, deposit-taking ATM and POS network with multiple processor links, hundreds of thousands of POS locations at national retailers and local merchants, and more than 100,000 ATM terminals nationwide.
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