Hunt looks to payments systems shift
Sept. 12, 2013 – NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt looks ahead to the changing payment systems credit unions will soon have to adapt to in an editorial posted on CUinsight on Wednesday.
In the editorial, Hunt wrote: “Member-focused, often smaller than other institutions and historically challenged by thin margins, credit unions will need to reevaluate their practices and consider ways they can adapt to the changing payments market. NAFCU is working at the front lines to protect credit unions’ ability to generate the income they need to keep serving their members, and that includes the ability to receive fees that cover their significant costs in offering card services. But time and progress will bring changes to the current infrastructure, and credit unions need to prepare.”
Hunt highlights the growing prepaid cards market, noting that if credit unions cannot sustain their current card services they might soon look to prepaid cards as a way to deliver essentially the same benefits to their members. She also notes that the CFPB is not far behind this new trend and said the bureau is expected to issue a related proposal soon under Regulation E, which implements the Electronic Fund Transfer Act.
She also discussed EMV technology and the reduced fraud risk it presents to consumers. In fact, a liability shift to EMV is set to occur in October 2015. “By then,” Hunt said, “any card issuer or merchant that does not have an EMV-enabled terminal will assume liability for counterfeit card transactions.”
Hunt explained that through this period of evolving payment systems, financial institutions will have to prepare and be ready to incur the extra costs.
“NAFCU will continue efforts to ensure credit unions’ interests in Washington, but adapting to new technologies and consumer demands is something credit unions will be dealing with head-on – as they have always done,” she said.
CUinsight: "Evolving Payment Systems Mean Big Changes for Financial Institutions" (9-11-13)