Debit card rewards programs at credit unions will survive the coming downturn in debit card interchange, but they will have to change and broaden their foundations in order to remain a part of credit union programs and services, card executives and consultants say.
"I think debit rewards will remain because Americans simply love rewards programs of all sorts," said Bill Lehman, a card consultant for Card Services for Credit Unions, the association of credit unions which process their card transactions with FIS. "Rewards programs have moved out of the credit card space and debit space and are now in retailers and online spaces because American consumers love them and have come to expect them," he said. "Their economics are what are likely to change a bit."
The future of debit card rewards programs has been in question ever since Congress included the so-called Durbin amendment to last year's financial services reform law which capped debit card interchange for card issuers with greater than $10 billion in assets.
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