Success enabler or cost recovery: The paradox of transaction fees for credit unions

first_img 6SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Fees are a touchy topic. While they represent a meaningful revenue opportunity for most credit unions, they are hotly debated by leadership teams and can be vilified by members—even ranking as a top reason to change primary financial institutions.In the current climate, it’s challenging to keep return on assets (ROA) where it needs to be without some element of transactional fee-based revenue. So the question isn’t “if” but “how” credit unions should include fees in their operating plans.Many credit unions justify new transaction fees by saying they help offset the cost of new technology. The paradox here is that most new technologies create self-service capabilities.And, being a consumer, I think if I serve myself it should be cheaper. Credit unions and other financial institutions have marketed their way around this expectation with the term “convenience fee.”This can be counterintuitive because we expect personal service to be better and, therefore, more expensive, and we expect self-service to be cheaper. To go against this market norm you either have to have a monopoly or a novel self-service solution. continue reading »last_img