DUBLIN, Ireland–Credit unions in this country have seen a surge of members opening “current accounts,” with the pandemic helping to boost the numbers and especially contactless payments, according to a new report.
The new accounts were launched in October of 2019 in a limited number of credit unions, and so far 20,000 have been opened, the Independent reported.
“Sources say the Covid-19 crisis has prompted more people to switch from using a bank to using a credit union account to manage their day-to-day payments,” the Independent stated. “March and April saw a 35% surge in the number of members opening an account.”
Available at 34 CUs
As CUToday.info reported earlier, some 34 credit unions, with a combined 160 branches, are now offering the option of opening what in this country is called a “current account.”
The account offers a MasterCard contactless debit card, and those using the card upped their contactless spending by 63% in March and April. Contactless transactions now account for 43% of all payments, the Independent said.
“Moves by banks to impose fees on the use of their current accounts prompted the credit unions to offer an option to undercut these charges,” noted the Independent.
The credit union product charges a monthly fee of €4, which covers unlimited point of sale and contactless transactions, mobile and online transactions, standing orders, direct debits and five ATM withdrawals per month. In addition, the current account—which is uniform across those Irish CUs offering the product—has no surcharge for an unauthorized overdraft, and the overdraft rate is 12%.
Not Concerned About Fintechs
Credit union representatives told the Independent they are not concerned with the growth of fintechs, such as Revolu and N26, which have also seen a surge in the opening of digital accounts.
"With bank charges being hiked by Ulster Bank and signaled by AIB recently, and with consumers likely to face further increases, it is great for the Irish consumer that more competition has entered the market," Michael Byrne, the manager of Core Credit Union, told the Independent.
The president of the Irish League of Credit Unions, Gerry Thompson, was critical in comments to the Independent regarding a decision by the Central Bank to only permit larger credit unions to offer the account. Ireland’s Central Bank regulates credit unions.
The league wants all credit unions to be allowed to offer it. But the Central Bank only considers applications from credit unions with assets of €75 million or more, the Independent said.