Credit unions set to roll out debit cards

Credit unions will aim to have issued 500,000 of their new debit cards within the next five years to make the project viable, according to the head of the company rolling out the project.

While 11 credit unions are set to introduce a Mastercard debit card service for their members, the Credit Union Service Organisation for Payments, is also working on a debit card for other credit unions.

The credit union organisation is a not-for-profit, independent company that provides an electronic payments service for credit unions and it will oversee the installation of the infrastructure that will see the introduction of debit cards for credit union accounts by the end of the year.

Kevin O’Donovan, CEO of the credit union organisation, said that the targeted take up of such cards will be about 15% of the credit unions’ 2.9 million members.

Mr O’Donovan said that a “complicated jigsaw” must be put in place before the cards can be introduced, a process that involves putting in underlying BIC and IBAN structures on accounts along with customer care and fraud-management services for the cards. The cards are at the closed testing stage and are not yet available.

BIC stands for bank identifier code and IBAN for international bank account number.

In the past 15 months, the credit union organisation has provided electronic funds transfer and payment services to over 50 credit unions.

“It will be a fantastic service. Credit unions need to be able to provide a real alternative to personal bank accounts, and it can be more cost effective as they are not for profit organisations,” he said.

Mr O’Donovan also said the introduction of debit cards to credit union accounts should be seen in the wider context of the Government’s plans to modernise all welfare payments.

A report by the Department of Social Protection pointed to the introduction of a standard bank account as method of providing banking access to those in receipt of welfare payments.

“Payment by electronic funds transfer will enable payment into the Department of Social Protection customer accounts such as bank accounts, many credit union accounts and accounts with other financial institutions.

In addition, the department will work on a cross-government basis to support access to the new standard bank account. This new transaction payment account is a key to enabling customers who do not currently have bank accounts to access electronic payment services,” a 2013 department report on payment strategies read.

Mr O’Donovan said the credit union sector could provide an alternative for hard pressed families and that the not-for-profit institutes would prove to be a more affordable way to bank.

The 11 credit unions set to offer debit cards to their customers are: Ballyphehane, Gurranabraher and Mitchelstown in Cork; Tralee in Kerry; St Canice’s in Kilkenny; Navan, Co Meath; Tullamore in Offaly; Tipperary; Waterford; Mullingar, Co Westmeath and the Health Services Staffs Credit Union.