A new white paper from the CUNA Operations, Sales and Service Council suggests that credit unions should begin educating their members now about the benefits of using their credit union debit card over other decoupled debit cards.

Decoupled debit cards-those issued by another institution but linked to the credit union members' account-appropriates the card interchange income to the decoupled issuer and leaves the credit union with the ACH fees.

"While decoupled debit may seem like a threat, it is actually an opportunity for credit unions. In understanding the wants and needs of consumers and merchants and the appeal of decoupled debit, a credit union can re-engineer its debit card offerings to be a competitive alternative," wrote Elizabeth Thompson, author of "The Decoupled Debit Dilemma."

"Credit unions should segment out those who use debit cards the most, and determine why, how, and where they are being used. Debit-savvy users are one target demographic that decoupled debit will seek to exploit. Therefore, credit unions need to learn what motivates these consumers and get to them first."

Thompson's paper recommends analyzing which members use debit cards the most, what they want from the debit card relationship and what it will take to be able to supply those things. She also recommended educating members about the disadvantages of decoupled debit cards.

Instant Insights /

CUNA White Paper Urges CUs Get Moving on Decoupled Debit

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