Nevada FCU Seeks to Prevent Interchange Hit
Like others across the U.S., the $689 million Nevada Federal Credit Union has started early in preparing for the prospect of higher interchange costs by launching an ad campaign series. The ads offer member incentives such as giveaways and cash backs in order to raise fee income.
The state’s second largest credit union said it has launched three separate campaigns under the umbrella branding "Go Debit Card Crazy."
"Our goal is to pick up what we can in lost revenue given the possibilities of what happens in the Congress and in the marketplace," explained Greg Barnes, senior vice president of marketing.
Under the promotion, members are eligible to win five prizes encompassing popular electronic products like the iPad, Playstation 3, iPod Touch and Amazon Kindle by swiping their debit cards often for everyday purchases like gas and groceries. "Five lucky members with the most eligible debit card transactions during May will win," said the ads, which include print and direct mail. Two other promotions aimed at members who do not or seldom use their debit cards give prizes or 2% cash back on transactions. One ad reads, "Are you in love with your Nevada Federal debit card?" and suggests they use it "like crazy" to win the prizes.
The Go Debit Card Crazy campaigns are being conducted as Nevada Fed continues its parallel lobbying effort to persuade congressmen, including Sen. Harry Reid, Senate majority leader (D-Nev.) and Sen. John Ensign (R-Nev.) to support the interchange cap delay.
Meanwhile, Barnes said management felt the CU needed to protect itself against the large interchange income decline, which for Nevada Fed could run to $4 million a year.
"Just look at what the banks like Wells Fargo and others are doing, implementing $5 surcharge fees for ATM and elimination of free checking and that means everybody has to be ready, to be prepared," said Barnes.
Merchants could eventually "stop taking our cards, discriminating against us," which is why Nevada Federal remains unenthusiastic about the two-tier system that has been put forward, said Barnes.
Based on the Go Crazy campaign, Barnes said the CU is forecasting a 20% increase in debit transactions for the targeted groups. "For the contest, by looking at the existing high debit card users, I think the winner will be 300 to 400 debit transactions," he said.