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

The alerts, while perhaps cumbersome, are generally perceived as a win for consumers. The alerts are designed to send a message every time a transaction is made with the Visa card.  There have been consumer complaints that the alerts can be distracting, and in cases where joint accounts are held, the element of surprise birthday gifts between spouses diminishes, for example. For the most part, though, in a world of ever increasing fraudulent activity, consumers stand to benefit from these credit union card services.

The rules will not require a consumer to participate in the program, but does require that Visa issuers at least offer the option.

Visa is offering a few different programs to enable card issuers to easily turn the service on, ranging from white-label solutions that allow card issuers to brand the service and alerts, to a very basic, no-cost solution that requires the consumer to subscribe to the service on Visa's website. However, credit unions who offer in-house credit cards should familiarize themselves with the existing credit union card services they may already have in place from their core technology provider, and decide how and if they want to enhance those in order to meet the requirements as put forth by Visa.

Ideally, a credit union would want all notifications to their members to be branded as theirs, which would allow easy member recognition as a service the credit union is providing. With Visa's free version of transaction alerts, there are no branding options, which may cause your members more confusion. But with a little member education, this solution allows a credit union to meet the Visa rules at little to no cost.

By purchasing a white-label solution from Visa, credit unions are able to maintain consistent branding, but miss out on an opportunity to provide greater value to members through integration. As the product matures, integrating these alerts with other credit union card services you offer may be a great option to enhance member services. For example, having a mobile banking app or internet banking product that has remote controls for cards can allow a member to immediately turn off their credit card when they are alerted to a suspicious transaction.

There are no right or wrong answers at this stage of the game for implementing this new Visa rule. As we approach October, it may become more a question of what budget and time constraints allow for your individual circumstances. And perhaps the solution you put in place for 2016 evolves in 2017 as members embrace the technology.

1. Javelin Strategy and Research 2013.