Credit unions to get own debit cards
Credit unions are lining up to take on the banks, with large numbers now set to provide electronic payment options to members.
And the locally owned lenders are also about to apply to the Central Bank for approval to offer debit cards.
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 banks' current accounts.
Recent research by Dublin City University finance lecturer Dr Michael Dowling found that 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 hiked charges and fees for day-to-day consumer banking services.
Now it has emerged that five credit unions have already launched online payment services.
This will allow members to have their wages or pension paid directly into their member accounts and make payments out electronically.
Credit unions in Malahide, Co Dublin; Clara, Co Offaly; Rathfarnham, Co Dublin; Carrickmacross, Co Monaghan; and New Ross, Co Wexford, are up and running with the new system.
The roll-out of electronic payment services comes after a body owned by credit unions, the Credit Union Service Organisation for Payments (CUSOP), got a licence from the Central Bank at the end of last year to operate the new system.
CUSOP boss Kevin O'Donovan said the electronic payments infrastructure would also be rolled out next month in credit unions in Letterkenny, Co Donegal; Portlaoise, Co Laois; Oldcastle, Co Meath; Baldoyle and Portmarnock in Dublin; and Dundalk's Cuchullain.
Nine more credit unions were scheduled to launch an electronic payments option in May, with up to 35 more scheduled to be live by July.
By September, it is expected that 60 credit unions will be offering electronic payments services through the CUSOP arrangement.
There are 390 credit unions across the State with 2.9 million members. Before CUSOP was set up just 43 of the community lenders were able to process electronic payments – or 10pc of credit unions.
Mr O'Donovan said the next move was to provide debit cards, which are similar to the old Laser card as money can only be spent if there are funds in the account linked to it.
"Debit card and other services are subject to Central Bank approval which we will shortly be seeking," he said.
A debit card option for credit unions could be in place by the start of next year, he said.
Garda credit union St Paul's and Bishopstown, both in Cork, already offer debit cards in addition to electronic payments.
Mr O'Donovan said credit unions in the North were seeking funding from the Assembly to develop full current accounts, which could lead for pressure for something similar here.
Research commissioned by the Central Bank found that consumers were confused and unsure about bank charges being imposed on them.
And people were resentful and cynical about banks, the research found.
Banks have responded to being bailed out by taxpayers with a new regime of charges and fees, some of which can't be avoided.
The research, carried out by for the Central Bank by Millward Brown Lansdowne, found fees of between €30 and €35 every three months were now the norm.