MCLEAN, Va. — Noted credit card issuer Capital One is working on a "decoupled" debit card product which will allow cardholders to withdraw funds from their credit union share draft accounts.
This will mean that credit unions and other financial institutions may be faced with losing debit card transaction income on their own branded debit cards and paying the ACH fees for transactions on any Capital One debit card their members use, this at the same time Capital One will gain the interchange on the transactions.
The new decoupled debit card will carry a MasterCard logo. According to sources, Capital One sought to put a Visa logo on the card but the number one card brand turned down the issuer. Neither Visa nor MasterCard has yet commented on the new product or their role in it.
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Credit unions need to be aware of the possible coming wave of change for a couple of reasons. First, the new Capital One debit cars is likely to carry a much stronger rewards package than most other debit card issuers will be able to offer. Second, the product is liable to be emulated, transforming the current debit marketplace from one where debit cards are the stickiest of financial products to one where they might as much a commodity as credit cards.
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