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One of the few things we can be sure of in the current situation is that we cannot control the forces shaping the economy. So it makes sense to focus on the things that we can control. And among credit unions, one of those things is value. No matter what happens in the economy, a credit union’s choice of networks plays a vital role in the control each credit union has and in the value it receives from its network.Those credit unions that choose a member-owned network for both ATMs and point-of-sale will, I believe, experience the most success both during and after the current economic downturn. They will have the most control, and they will receive the highest value from their membership.Why? Because ownership by a network’s members gives those members a voice in the decisions made by the network. It gives credit unions the direct control needed to leverage their collective resources to achieve positive results for the entire network and its participants. Credit union ownership of influential delivery channels empowers the movement itself by giving credit unions a voice at the table.A member-owned network consisting of both ATMs and POS offers participants the opportunity to take advantage of POS interchange fees, which are the growing, dominant transaction set and the one responsible for an expanding portion of a credit union’s noninterest income. Credit union control over this segment has sufficient value on its own in long-term benefits of credit union self-determination. It is made even stronger by a credit union-centric interchange model.In addition, a credit union-owned POS network means credit unions can establish interchange rates and manage their relationships with merchants. When a network’s transaction volume is appropriately aligned with merchants, credit unions have the potential to benefit from increased interchange revenue.When control over interchange rates and merchant fees remains in the hands of a non-cooperative institution, the very essence of the credit union movement is compromised. It runs completely counter to the core principle of the movement: member ownership, resulting in member-driven decision making and control.

Peter Westerman

Credit Union Times

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