AFTs offer new opportunity—and risks—for credit unions

Account funding transactions (AFTs) are growing in usage as consumers increasingly embrace digital payment services offered through PayPal, Venmo, Starbucks, Apple Pay and even Uber. For members, AFTs are a more efficient and convenient method of transferring funds, but they have some downsides for credit unions, including reduced interchange revenue and fewer chargeback rights.

According to Visa’s Q1 2023 Performance Trends Summary, AFTs held a 7.0% share of total Visa payment transactions in the first quarter. Overall, AFTs posted 16.70% YoY growth in total transactions for the first quarter, third highest among merchant segments, behind only Travel & Entertainment (T&E) and Discount, Drug & Wholesale.

Co-op has been tracking growth in AFT volume, as well. Within Co-op’s client credit union payment portfolios, AFT transactions largely fall within the “Money Transfer (4829)” and “Cash Advance (6010)” merchant classification codes (MCCs). Both MCCs are up strongly year over year as of July 2023, with Money Transfer up 15.8% in credit and 3.6% in debit, and Cash Advance up 9.8% in credit and 29.2% in debit, on a rolling 12-month basis.

Another merchant classification “Quasi-Cash – Member Financial Institution” where transactions from digital payment services and crypto firms pass thru is up 45.3% in credit and a massive 241.8% in debit on a rolling 12-month basis.


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