Credit unions that participate in CO-OP Financial Services network will soon have access to more than two million point of sale terminals nationwide after the payments CUSO announced a deal with transaction processor First Data.
The deal means that holders of CO-OP Network debit cards will be able to use point of sale terminals the carry the STAR Network logo. STAR is a First Data subsidiary.
“CO-OP has considered offering PIN POS for many years, but only now have the right circumstances come together,” said Stan Hollen, president/CEO of CO-OP Financial Services. “In cooperation with First Data’s STAR network, our business partner for nearly 30 years, CO-OP can provide our clients with unmatched national PIN POS coverage and value.”
CO-OP has also signed a contract renewal extending its electronic funds transfer (EFT) network access agreement with the STAR Network.
CO-OP Network PIN POS service offers nationwide coverage that gives credit union members the convenience of being able to use their debit card where they want to and strengthens credit union relationships with members, especially those accustomed to big bank accessibility, CO-OP said.
Additional member benefits of the extended access agreement will include greater choice in payment method, easier access to money and PIN debit fraud protection, CO-OP added. The added POS revenue stream benefits all participating CO-OP members and, in the case of CO-OP shareholding credit unions, the POS transaction volume will also increase annual patronage opportunity, it added.
CO-OP expects to begin implementing the extended PIN POS service with existing clients beginning Oct. 15.
The move also has potential bring significantly more interchange income to CO-OP Network participating credit unions. According to a 2009 Federal Reserve study, which was conducted in preparation to write and implement regulations flowing from the Durbin amendment, STAR paid one of the highest interchange rates in the country for debit transactions validated by a personal identification number at an average of 32 cents per transaction. Interchange rates from other networks, including Credit Union 24, the other nationwide POS network owned by credit unions, came in more than 10 cents lower per transaction.
But Credit Union 24’s next CEO, Mansel Guerry, said the interchange rate had changed since that study and that his network has aimed to move its rate to around 30 cents per transaction to be more competitive with other nationwide networks. Guerry is slated to take over from current CEO, Jim Park, after Park retires on the first of next year.
Guerry also praised CO-OP’s move, calling it a very good development for the industry.