More plans for debit cards at credit unions
MORE credit unions are set to take on the banks with debit cards and current accounts, it has emerged.
Such a development should allow larger credit unions to become a "third force" in banking after traditional lenders and post offices, one financial expert said.
Credit unions in Co Tipperary and Co Offaly have just launched Visa debit cards, with another four piloting debit cards. It comes after this newspaper revealed 11 of the largest credit unions in the State are close to launching MasterCard debit cards.
Banks will view the moves as a direct threat to their strength of providing day-to-day current accounts and payment cards.
Thurles Credit Union, in Co Tipperary, and the one in Edenderry, in Co Offaly, have already gone live with Visa debit cards, according to Frank O'Regan, head of European operations at DCR Strategies, a Canadian company that works with credit unions on payment systems. Another four credit unions are piloting debit cards by giving them to directors and staff to test, he said.
These include the fast-growing E-Services and Communications Credit Union that grew out of Eircom. It is currently seeking permission to allow it to attract members from high-tech companies like Intel and Google.
Also piloting Visa debit cards are the credit unions in Gorey, Co Wexford; Carrickmacross, Co Monaghan; and Baileborough, Co Cavan. The four have a combined membership of around 70,000, Mr O'Regan said.
St Paul's Garda Credit Union has had a Visa debit card for a while, but is now planning to launch a nationwide campaign to its garda members to get more of them to "bank" with it.
Mr O'Regan said the aim was to sign up 1,700 members to the Visa debit card.
The attempts by credit unions to launch debit cards and current accounts that would replicate the standard services of the banks has been under the radar as credit unions fear upsetting its regulator, the Central Bank.
Operating an electronic payments system and a debit card does not need sanction from the Central Bank, but the regulator has been discouraging credit unions from moving too fast to introduce the new services.
Mr O'Regan said the charges for using the credit union Visa debit cards will be similar to that charged by banks for point-of-sale purchases, at 24c each.
For withdrawing cash from an ATM a charge of 69c is likely.
Eleven of the largest credit unions have come together in a scheme to offer customers MasterCard debit cards.
The cards will be on offer to as many as 250,000 people.