Credit Unions set to roll out debit cards
AS many as 250,000 credit union members are expected to have an option to get a debit card under a new scheme which will see the community financial institutions compete with banks.
Eleven of the largest credit unions in the country are set to launch the service offering full current accounts by the end of the year.
Banks are likely to see the development as a direct threat to their traditional strength of providing day-to-day current accounts and payment cards to their customers.
The 11 credit unions already offer their members online payments - where members can have their pay and pensions electronically paid into their credit union accounts.
Members can also put in place direct debits and make electronic payments out of the accounts.
Now the credit unions are set to add a MasterCard debit card.
The cards will allow members to take their money out of their credit union account though most ATM machines, as well as pay for goods and services in retail outlets.
The move is set to transform the services offered by credit unions, which have been concentrated on small loans and savings facilities up to now.
Thousands of people are expected to take the opportunity to ditch their bank's current account in favour of the credit union option once the new debit cards are operational.
The piloting of the new debit card option is set to be carried out at Tullamore Credit Union, which is currently conducting "systems testing".
Fintan Ryan, who chairs the 11-member credit union group, said the new debit card option will have lower charges than banks for the same service, although the fees and charges have yet to be finalised.
"Pricing has yet to be set, but as credit unions are not-for-profit organisations, the pricing will be very competitive and will vary from credit union to credit union depending on the local circumstances," Mr Ryan said.
He said the credit unions involved have been working on the project for two years.
"Should the trials meet with our expectations, and subject to satisfactory discussions with the various stakeholders, we hope to be in a position to roll this out to the membership of each participating credit union during 2015," he said.
He said that having a debit card facility would "complete the suite of account services and enable participating credit unions to compete on an equal footing with the banks".
Once the trials are complete, the debit card service will be rolled out to members of Health Services Staffs CU, one of the largest in the State with €190m in assets.
Currently St Paul's Garda Credit Union is believed to be the only one offering its members a debit card.