Long Swapout Process Likely to Limit Impact of NCUA Letter on FIS

by Mercator Advisory Group 0

The Credit Union Times ran a story titled “Impact on FIS Uncertain, Observers Say” with a lead in paragraph that suggests that time is on the side of FIS which later in the story was also the position taken by states:

A frequently long and complicated process to change credit and debit card processors will likely limit the impact of a recent federal supervisory letter on card processor FIS, according to some industry observers.

“This will cause reputation concerns for FIS and their Group Service Providers, but likely will be corrected by FIS and result in too almost no short-term changes by their processing clients,’ wrote Tim Kolk, founder of TRK Advisers, a card portfolio consultancy that helps credit unions improve their credit card performance.

The contrary opinion was delivered by an anonymous processing specialist:

But others counter that the security concerns outlined in the letter, which prompted the NCUA to advise credit unions to evaluate their relationship with the card processor for 5,400 credit unions, are sufficiently grave that they will be enough to lead some CUs to leave the processing firm.

But other observers noted that it’s become more common for credit unions to consider other card processors routinely as part of their contract renegotiation process.

Click here to read more from the Credit Union Times.