BASTROP, Texas – Credit union executives attending CO-OP Financial Services' THINK 09 conference were told that taking a critical look at their point of sale networks could save their credit unions a good deal of money.
Lynne Kneebone, Sales Director for CO-OP Financial Services explained that as part of the legacy of how POS networks developed in the U.S., many credit unions have been left with two or three or sometimes more POS networks. What they don't realize is that these networks do not all bring the same interchange and not using the one that brings the most interchange is likely costing them money, she explained.
In order to remedy the problem, she urged that credit union leaders carefully examine and analyze their flow of interchange to find the net interchange for each network they have and consider leaving the ones that do not bring as much money. Net interchange is the amount of interchange the credit union has left after the amount of money it pays in fees and some ATM transactions is subtracted from the amount of money it makes from other ATM and merchant transactions.
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"When a merchant has the same POS networks as you do, they can arrange them in order of which one they want to use first and, not surprisingly, they are going to choose the one that is cheaper to them and not as good for you," she said.
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