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Posted: Oct 3, 2018
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Author: Lou Grilli

The stakes are high - $90 billion in fees paid collectively by merchants each year, according to Bloomberg. The proposed class action settlement amount is record-breaking - $6.2 billion, the most significant dollar amount ever, to be paid to 12 million merchants who do not opt-out of the settlement.

What does this mean for the future of interchange fees? It’s still murky, at best.

A lawsuit that was being argued since 2005 was finally settled on September 18, 2018, some 13 years later. The class action was initially filed by the National Retail Federation, the Retail Industry Leaders Association, and the National Association of Convenience Stores, collectively representing about 12 million merchants in the U.S. It named Visa, Mastercard, and several large issuers, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. as Defendants. The suit accuses the defendants of conspiring to fix interchange fees that businesses pay to process credit and debit cards. A previous settlement had been reached in 2012 but was thrown out by the courts. This time around, the settlement, which still needs to be approved by the courts, leaves open several unanswered issues.

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Posted: Aug 28, 2018
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[Editor’s Note: Content from this article was previously published on CUToday, and has been modified]

For as long as payments have been around, there has been constant opportunities to invest in card programs to remain relevant by increasing member engagement and attracting new members. Given the continuous rise in the costs of running a successful card program, it is essential to make the time to complete an in-depth review periodically to ensure a smooth running and profitable program.

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Posted: Jun 8, 2018
Comments: 0
Author: Lou Grilli

[Editor's Note: This article was previously published in CUInsight, and has been modified.]

Credit unions think of branding in terms of advertising, mailings, inserts, logos and social media. However, payments, and all the touch points associated with digital and plastic payments, are an equally important part of a credit union’s brand.

Credit Union marketers are diligent in ensuring that the brand is consistent throughout all aspects of member contact. So, signage, logos, websites, mobile and online banking platforms are all inspected for consistency with the brand. Payments should also be included in this thought process.

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Posted: Feb 27, 2018
Categories: Debit Cards
Comments: 0
Author: Lou Grilli

If decoupled debit continues to gain acceptance among merchants, it will have an impact on issuers' card revenues.

[Editor's Note: This article was previously published in CU Insight, and has been modified.]

A few merchants have found that decoupled debit cards have helped to reduce the cost of payments acceptance without inconveniencing shoppers. This solution offers a significantly cheaper alternative for the merchant since payment bypasses the traditional payment rails, and instead uses ACH (Automated Clearing House) for payment from any of the shopper’s bank accounts. Whereas a merchant would typically pay its processor a 3% fee for the cost of processing a bank’s card, the fee to a third-party provider to handle the ACH is 0.8% and is capped at $5, and larger merchants can get even lower rates.

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Posted: Feb 21, 2018
Comments: 0
Author: Lou Grilli

Use of debit continues to grow as consumers shift their cash and check spend to the convenience of plastic. According to the Fed, the number of debit payments increased from 56.5 billion in 2012 to 69.5 billion in 2015, the largest increase in the number of payments among the payment types. More recently, and more relevantly, Trellance credit unions saw their Visa Signature Debit transactions grow year over year in January 2018 by 8.83%. Yet at the same time, credit unions are seeing a decline in average debit interchange. So, what is going on?

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