Credit unions take on banks with current accounts soon to be launched
Fifty credit unions are set to launch current accounts in the coming months.
This means they will become a viable alternative to banks for day-to-day financial transactions.
The new account will include a debit card, have an overdraft facility and allow for direct debits to be paid.
Credit unions set to launch the new offering include Sligo, People First in Portlaoise, St Canice's in Kilkenny, and Progressive in North Dublin.
Plans for the current account have been in gestation for years, but 50 credit unions have now been approved by the Central Bank. There are 264 active credit unions in the State.
Back in 2016, the Central Bank queried moves to launch an alternative to bank current accounts by 11 credit unions, despite the initiative being announced.
Many of those 11 are now set to launch the Central Bank-approved current account this year.
Registrar of credit unions in the Central Bank, Patrick Casey, told a Credit Unions Development Association conference that having a current account would be a huge move for the sector.
"This will be a significant development for the credit unions concerned, and is likely to be a central tenet of their aspiration to be a primary financial service provider for members," he said.
According to the regulator, the new account will work on mobile phones and online, with the debit card operating as an ATM card. It is understood most credit unions will have a debit card that will have the facility for contactless payments.
Manager of Sligo Credit Union, Barry O'Flynn, said the lender had been approved by the Central Bank to offer a current account to its 22,000 members. It expects to offer the account, which will have a contactless Mastercard, by the end of the year.
"If we are to be relevant to the next generation of credit union members, it is essential we offer, at a minimum, a debit card," he said.
"Our online access and mobile app provide an element of this but we can no longer expect our next generation of members to walk into our offices to withdraw their funds or make a payment."
An Irish League of Credit Unions spokesperson said: "This will be a significant and welcome development for members who wish to transact all their business through their credit union rather than through one of the main banks."
Some credit unions already offer debit cards. But these tend to be operated off share accounts and do not always offer the full functionality of a standard current account.
It comes as An Post is making a strong play with its new Smart Account. It is offering €30 free for each new account by the end of March with a minimum deposit of €30.
And thousands of younger people are using fintech competitors N26 and Revolut, which operate using mobile apps. Revolut already has more than 200,000 Irish users.
Last week, Permanent TSB said it was changing the rules for its older current accounts, meaning thousands of customers will have to pay fees.