The month of July is here and with it brings the mid-summer shopping frenzy. Credit cards get a work-out as consumers join the melee of sales, deals and offers too good to resist. The traditional Christmas in July sales offer consumers great deals on big ticket items like cars, laptops and electronics, among other in-store and online deals. Those sales are further boosted by vacation and travel spending (gas, hotels, car rentals, airline, and amusement park tickets) and the eventual back-to-school shopping. Adding to this mix for the last 5 years is a new consumer shopping phenomenon - Amazon Prime Days.

To date, credit unions have been faced with the choice of providing credit card processing in-house or outsourcing. Historically, only big credit unions ran in-house credit card processing. Smaller CUs shied away from credit card processing due to a variety of factors: It was expensive to do so in-house, and outsourcing was often difficult to integrate with the core. Furthermore, the rewards programs were not up to par with those of banks and larger FIs, which made them less desirable to members. Now, with increases in integration capabilities and decreases in cost, credit unions of all sizes are incorporating integrated processing capabilities. Here’s why credit unions big and small have opted for integrated credit card processing.

Consumer lending has many forms and credit cards are increasingly a profitable one for credit unions. Historically, the industry has looked to outside vendors for credit card management due to its inherent risks and complexities. As core processors catch up to technology advancements and credit unions acknowledge technology to be of crucial importance to survival, in-house card management is a reality for many credit unions. Below are two of the main reasons that credit unions are jumping on to the in-house credit cards trend, and one reason your members will love you for it.

We hate to be "that" person, but we told you so. As predicted, Card Not Present (CNP) credit card fraud continues to rise since the establishment of EMV technology (chip cards) last October. CNP transactions include any payment made where the card is not physically present, online, over the phone or mobile. While card present fraud experienced a 43% decrease, according to Visa, CNP fraud experienced a direct increase. The US Payments Forum 2017 report stated that the increase in security of chip cards forced fraudsters to focus their attention on an easier target: CNP transactions. The report concluded that this trend will continue into 2018 and consumers can expect fraud dollars to exceed $6 billion.

We are living in a material world... wiser words have never been spoken from the mouth of an 80's pop icon. Credit cards have allowed material girls (and boys) to ramp up material possessions with ease, for nearly all income levels. According to a 2016 Harvard study, 94 percent of upper-middle-income Americans have a credit card, whereas only 59 percent of low- to moderate-income consumers in the US carry one. No matter the demographic your credit union serves, the majority of your members rely on their credit cards, and this serves as an additional source of revenue for your CU...give them proper credit, or they'll just walk away. If your credit card management system is via a third party, there are three main reasons you need to switch to in-house credit card processing: 1, Operational efficiency. 2, improved member services. 3, cost cutting measure.

Everyone loves a warm, sunny day, but there is a threshold for tolerance before it becomes too hot to handle. As the summer sun cranks up the heat, people seek ways to escape the extreme temperature. People also love the convenience of credit cards and are willing to pay interest to buy now, but they too have a limit on how high you can crank those interest rates up on your card products before they run for alternatives.

Last year at this time, news feeds for credit unions featured information about the Chargeback Liability that was taking place in October of 2015. Among the highlights were the importance of educating your members on chip technology and deciding when to issue chip enabled credit cards. Not to disappoint, new deadlines were set for October of this year that have received similar attention. The new deadline for ATMs to accept EMV chip cards from MasterCard is set for October 2016. Before the details, here's a look back on how EMV has impacted credit unions in the past 10 months.

EMV acceptance at ATMs is not the only looming deadline for October 2016. Effective October 14, 2016, Visa Rules will require all U.S. issuers of consumer class Visa credit, debit and reloadable prepaid cards to provide an option to enroll in transaction alerts to their consumers. These alerts will enable cardholders to quickly identify suspicious purchases on their accounts when the chosen method of notification is received (text message, email, or in some cases, in-app push notifications on smartphones). The motivating factor behind this rule is Visa concluded that alerts are a proven method to mitigate fraud after conducting an internal study that found transaction alerts can reduce fraud by up to 40%.¹

It is no secret that with the many changes facing the payments industry, consumers are growing confused and irritated. When it comes to mobile wallets for example, last year proved to be a year where big promise was projected for the likes of Apple Pay, yet adoption numbers are now reported to be lagging, coupled with the fact that 47% of users had experienced unexplained failed transactions. But the biggest source of frustration in 2016 for payment technologies is proving to be EMV.