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5 posts categorized "Debit Cards"

June 17, 2014

There Are No "Quiet Exits" in the Payment Game


by Ron Daly

By now, you've likely heard the news that the Approved Card, the prepaid financial product promoted by none other than Suze Orman, is shutting down. You probably remember a few years ago when much ruckus was raised over Orman's endorsement of this high-fee product.  Now, Orman is seeking to exit the payment space "quietly", according to the New York Times.

Trouble is, there's no such thing as a "quiet exit" in this space. Who would expect silence after such a loud and hotly-debated entrance? Suze claimed her card would be the beginning of a revolution. 

From The Daily Beast

Even so, the Money Navigator flap was a minor blip compared to the storm Orman ignited in January 2012. That’s when, declaring a “financial revolution,” she launched the Approved Card, a prepaid debit card backed by the Bancorp Bank, the top issuer of prepaid cards in the U.S. “You can always bank on me,” Orman announced during the accompanying promotional blitz.

Well, it would appear the revolution has come to a bitter end. And as far as "always banking" on Orman? That's officially false as of July 1, when the cards will stop working. As for all the critics Suze called "idiots" and publicly shamed for questioning her judgement, I imagine they feel vindicated when they read these words in the New York Times

It is unclear exactly why Ms. Orman’s venture is ending. A spokesman for Bancorp Bank, which ran the back-end systems for Approved, declined to comment, citing a policy of not making statements about its partners. Ms. Orman could not be reached for comment. The website for the card does not appear to have been updated recently, and as of Monday night, had no mention of the card’s status.

If that wasn't enough, my attempts at reaching the Approved Card website turned up an error page. Seems as though someone doesn't want to say anything...which says a lot.

I'm not trying to diminish Ms. Orman's record as a financial adviser; many people adore her and trust her advice implicitly. But I imagine she's going to have a heck of a time explaining what went wrong with the Approved Card to its now-unbanked users...if she bothers explaining at all.

There are no "quiet exits" in the game of payment and finance. If you don't want to do the talking, don't worry - the consumers will do it for you. 

May 10, 2011

Domino Effect: Are You Helping the Member Understand?


by Ron Daly 

Sometimes the best way to get a result is to give a system a little push. You have to pull the choke to get the lawnmower to start. You give your kid a gentle push on their bike so they can start pedaling on their own. And sometimes, to get members to take action, you have to tell them what's at stake. 

We've talked about Interchange before. The debate is raging on, but that hasn't slowed down the legislation or the outcry on both sides of the wall. Retailers want fewer swipe fees and finance folks all know that we'll be killing free services if we lose Interchange income. The Electronic Payments Coalition has another commercial out about "the domino effect": 


Bill Cheney at CUNA said that over a quarter of a million members have written in to change the rule, according to this NPR article. An article from the CU Journal says the Fed is working on a compromise that will try to please both sides...word's out on whether or not it will, seeing as the cap will still go into effect. It's going to be tough for people to suss out why this all matters, because both groups say they're acting in the best interest of the consumer. 

This is a perfect example of how a national campaign for credit unions would work. A large body (or bodies) would put out the word about CUs and...what? Everyone would know what to do? Examine the video above; what does it ask of the viewer? Do they know who to contact? Who are the champions of "not changing Interchange" in Congress? 

It's time you gave your system a little push. 

Your homework is to think up ten (10) ways to educate YOUR members about Interchange. How are you going to do it? Can you rope in a Senator or Representative to come talk to your members? How about a letter to members? How about a video from your CEO asking members to talk to Congress? Localizing and personalizing a problem makes it stand out more. How are you going to tell your members "if you don't act on our behalf, this is going to hurt"?

Tell us about it in the comments section.

March 10, 2011

Adding Ads to Statements: Some Food for Thought


by Ron Daly 

I'm always surprised the kind of ads that show up while I'm "surfing" (is that still the word?) online. 

Sometimes, they're interesting. Sometimes, they're just awful. And sometimes, they relate to me on a personal level. 

Like LL Bean and other clothiers - they seed ads for their shirts and shoes into my daily browsing experiences. I'm usually buying those things online, so it's a tight fit, advertising-wise. 

But imagine if LL Bean read my credit union statements and saw what I was buying. What if they sent me personalized offers based on my spending habits. 

Imagine no more- it's a reality. Several companies do it, and do it very well. But as more attention is drawn, I begin to wonder: will the reaction of consumers be positive? 

The public is getting hip to the idea of in-statement/in-PFM ads. Check out this article from the Today show website

Continue reading "Adding Ads to Statements: Some Food for Thought" »

February 16, 2011

Cats and Dogs Unite!


The enemy of my enemy is my friend, according to the Banking and Credit Union industries...

by Ron Daly 

While sipping my morning cup of joe and watching the news, I came across this commerical (embedded below, or watch on YouTube here.): 

Two things that struck me about this: 

  1. Are moms that unpack groceries the only people affected by anything anymore? I've seen a dozen commercials with that main character.

    Now, here's the other, more important thing...

  2. Did you catch who was sponsoring that commercial? 

That's right, it was the ABA, CUNA, and NAFCU all working together to...

Wait, ABA and CUNA and NAFCU?!? Working TOGETHER?

Yes, it seems these bitter rivals are putting aside their differences to attack changes to debit card laws and interchange. They know that banks and credit unions alike will be harmed by changes to interchange, as evidenced by this NAFCU story

The survey, for the February issue of NAFCU’s Economic & CU Issues Monitor (formerly the Flash Report), showed that debit interchange fees made up one-fifth of respondent credit unions’ non-interest income last year. The Dodd-Frank Act provision calls on the Federal Reserve to set a “reasonable, proportional” fee on debit transactions. The Fed has a proposal out that would place this fee from 7 cents to 12 cents, which would cut credit unions’ interchange fee income by as much as 80 percent.

Despite the law’s small-issuer exemption, there is nothing to prevent card networks from applying this low fee to all issuers regardless of asset size. Of NAFCU’s survey respondents, 75.4 percent said they have reviewed or will review their business plans for other ways to pay for fraud, data security and other costs associated with providing debit card services.

As much as 80% of income cut? That's rough. No wonder NAFCU and CUNA have put down the cudgels and started shaking hands. What's the old proverb?

"Me against my brother.
Me and my brother against my cousin.
Me, my brother and my cousin agains the outsider."

Or something to that effect. And if NAFCU and CUNA teaming up doesn't surprise and stun you, certainly their pairing with ABA should. And the whole group of them have joined with Visa and MasterCard and countless other groups and businesses to get the word out about interchange and how, eventually, it will do more harm to consumers. 

Next thing you know, my dogs and my neighbors cat will join forces and start demanding more treats. 

Is this video (or any of the other resources available on the Electronic Payments Coalition website) something you want to put in front of members via your website? Feel free to pay them a visit and see if there's something there you want to use to spread the word.

[Special thanks to Keith Leggett's blog for embedding the commercial we were searching for this morning.]

June 02, 2010

Interchange Fees and Credit Unions - Members Taking Action


by Ron Daly 

Interchange fees are the topic of many blog posts in the industry these days. Some posts are for changes, some are against, some are matter-of-fact and some are downright angry. One alarming article released yesterday says that 90% of yearly interchange revenue could be lost, which comes down to "$15 to $35 per debit card per year". 

CUNA has been pressing the issue in its daily News Now emails. Today's story deals with the Treasury and what Dan Mica called the "most serious threat" facing CUs at this moment in history. But it was a different story (and a different reaction by our company's clients) that caught my attention. 

Read this excerpt from the News Now article, "Grassroots interchange opposition, strong and growing":

WASHINGTON (6/2/10)--While the halls of Congress have emptied for the week, grassroots credit union advocacy regarding interchange legislation continues this week through both legislator-led town hall meetings and credit union activism on several fronts.

One of those fronts is a Credit Union National Association-backed effort to verbally and electronically reach out to representatives, and this communication effort resulted in over 80,000 individual contacts as of Tuesday.

CUNA is asking credit union backers to urge their legislators to oppose federal intervention into the current interchange rules. An amendment offered by Sen. Richard Durbin (D-Ill.) which was successfully added to the Senate's regulatory reform package would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions. CUNA has recently said that this rule change forces the Fed into the role of a price-fixing body, when interchange fees should be driven by market forces.

State credit union leagues have also chipped in to back credit union concerns, and Virginia- and Louisiana-based credit union leagues are among those that have joined state-level small banking associations to publicly oppose federal interchange intervention.

Some examples of emails sent to members, compelling them to call and email their leaders and take action: 

From Horizons North Credit Union

Screen shot 2010-06-02 at 9.25.53 AM

From Shell Federal Credit Union

Screen shot 2010-06-02 at 9.25.00 AM 

From Belvoir FCU

Screen shot 2010-06-02 at 9.24.12 AM 

They're simple emails with a simple message: "Interchange is going to hurt the credit union. Contact your leaders now and tell them to act in our mutual best interest."

What does it cost you to send an email to your members? Hopefully, the answer is "not much". How much will interchange fee changes hurt your CU? The answer is probably "a lot". Risk versus reward, people. Members need to know about things like this and when it comes to asking them to do something as simple as sending an email, that's only about three minutes of their time. Never hurts to ask, right?

So, here's your million-dollar-question-of-the-week: What's your credit union doing to encourage calls and letters to legislators from members? Tell us about it in the comment section.