It has definitely been an up and down year here in America. We have seen the roller coaster ride of Congress coming to an agreement on the debt ceiling. The stock market has been wildly fluctuating up and down (mostly down). The NFL season was almost lost and we still don’t know if the NBA will have a season this year. While all of this was happening, one area that garnered a lot of attention in the financial world was debit interchange.
This week I found myself answering numerous questions related to the required use of two unaffiliated networks. There has been a lot of discussion within the industry over how credit unions will comply with this requirement and what methods they can use to instill two unaffiliated networks.
As you may have read or heard, the debit interchange rule states that “the issuer must allow for an electronic debit transaction to be processed on at least two unaffiliated payment card networks.” The Fed has stated that this can be accomplished in a couple of different ways. One way to follow the new rule is to have two unaffiliated payment card network available for signature debit transactions. Another way is to have two unaffiliated payment card network available for PIN debit transactions. The final (and recommended) way, would be to have one payment card network available for signature debit transactions and a second, unaffiliated payment card network available for PIN debit transactions.
Do remember, that this part of the rule will become mandatory on April 1, 2012. It is best that credit unions start researching their options now. That way when April 1st comes around, you can hit the ground running and be in compliance with this part of the rule.