Paradoxically, credit unions may need to act to increase debit transactions if a cap on debit card interchange makes it into federal regulation, a specialist on checking and debit maintains.
Robert Giltner, chief strategist for checking and direct deposit accounts for Velocity Solutions, Inc, a financial consultancy and technology firm contends that if the income per debit transaction drops, the most financially sound thing to do is to increase the numbers of debit transactions and take other measures to increase direct deposit account revenue.
One way to do that might be to charge a small fee for debit card issuance but waive that fee if the debit card holder makes a certain number of transactions per month, he explained. Or studying the behavior of members who already use their debit cards but who also use a lot of cash.
"How can credit unions move more of these cash transactions to debit card transactions," he asked.
He also maintained that while some banks would likely start to charge fees on checking accounts, the trend would probably not extend to all banks. This means that if credit unions continue to offer free checking, they stand poised to pick up new members from among consumers who will not pay for a checking account, provided credit unions continue offering free checking with debit cards.
"The debit card is the single most successful and innovative financial product in the last 30 years," he said, arguing that financial institutions will act foolishly if they try to limit or stop the way consumers use their debit cards.