Personal Finance

Friday 1 August 2014

Credit unions will take on banks with new debit card

Charlie Weston Personal Finance Editor

Published 22/05/2014|02:30

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CREDIT unions are speeding up the roll-out of new electronic payment options and are in talks with Visa and MasterCard about providing debit cards for members.

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The revelation came as AIB admitted it suffered a new payments blunder that saw thousands of pensioners and people on disability payments hit with delays getting access to their money.

It is the latest technical issue for the bank that also suffered delayed payments in January and February.

But it has emerged that consumers could soon have an alternative to the banks – as 75 credit unions expect to be able to provide electronic payment options to their members by the end of this year.

Another 100 will be set up by the end of next year to allow credit union members to have payments from a bank, employer or social welfare office sent directly into a credit union account by electronic transfer.

It is expected half of all credit unions would be able to offer electronic payments by end of 2015. This would serve around 1.5 million people.

Michael O'Neill, chairman of the Credit Unions Services Organisation for Payments (CUSOP), revealed that talks were taking place with MasterCard and Visa on a credit union debit card.

Charges

A deal to provide a debit card could be in place by the end of this year, Mr O'Neill said.

The combination of electronic payments and the ability to offer debit cards will see credit unions putting it up to the banks by offering an alternative to the banks' current accounts. CUSOP was set up by 168 credit unions to put in place the new electronic payments options.

And banks have been hiking charges for day-to-day banking. A family with two current accounts will end up paying €260 this year in fees and charges.

AIB, Bank of Ireland and Ulster Bank have introduced, and then increased, charges and fees for current account banking services. Credit unions are expected to offer current accounts cheaper than those provided by banks.

The news came as AIB admitted a new blunder meant it was unable to process payments due to thousands of people yesterday.

Customers reported that a payments processing issue meant thousands of customers were hit with delays impacting their disability allowance, as well as other payments that were due to enter their accounts.

An AIB spokeswoman said the bank was made aware of payment problems and insisted that the issue had been resolved after a couple of hours.

Irish Independent

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