Letter from Chuck: Data Security, Apple Pay and More!

by Chuck Purvis

President & CEO

6.22.2015
|
From Chuck

Dear Members,

I am taking a new approach to my periodic letters to our membership, beginning with this one. Each quarter, I will share with you a preview of what you can expect from Coastal in the months ahead.

The credit union has enjoyed a solid first half of this year, including a record $2.1 million VIP Payout and the opening of our new White Oak branch. We’ve also been positioning ourselves to be competitive in the deposit market. In February, we launched our new Go Green Money Market account, which works in tandem with Go Green Checking and pays a higher yield when you use your Go Green debit card. We’ve also beefed up our certificate rates, and are currently offering the highest returns in the Triangle.

Looking ahead, one topic that’s been on my mind is data breaches. Merchant card compromises are a source of frustration for members and the credit union alike. Even though the data breaches have all occurred at merchants or processors, credit unions still bear the cost of replacing the affected cards, as well as any fraud that actually occurs (members are never liable for fraudulent transactions). In 2014 alone, this resulted in a direct expense of nearly $360,000. On top of that, we incurred other processing and communication costs, and absorbed the cost of fraudulent charges that occurred on those cards prior to us being able to deactivate them.

Many times, we don't know or aren't allowed to reveal who the merchant was, which isn't much consolation to an upset member who only knows that their Coastal card was compromised.

Because of this, Coastal is teaming up with the Carolinas Credit Union League and CUNA to participate in the Stop the Data Breaches campaign. In the next few weeks, we’ll be asking our members to contact your congressional representatives to encourage them to take action on the Data Security Act of 2015. This bill strengthens merchant security standards, mandates notification requirements and helps hold responsible parties accountable when a breach occurs.

On Coastal’s end, we’re working a few solutions to help mitigate the risk of card compromises. Two of these solutions, Apple Pay™ and EMV debit cards, are slated to be implemented in the coming months.

Apple Pay™ will allow users with a newer iPhone®, iPad® or Apple Watch™ to link their Coastal debit or credit card to their device, and securely pay for merchandise using the device instead of their card. When Apple Pay™ was first introduced, Coastal announced that we were among the first to sign up to participate. That process has taken longer than we expected, due to factors that were beyond our control. However, we recently received confirmation that our debit and credit card processors are now fully capable of supporting Apple Pay™, and we’re in Apple’s queue to launch service sometime in the third quarter.

On the card front, we expect to begin issuing EMV debit cards later this year. EMV cards contain a small microchip that provides an encrypted and therefore more secure transaction than traditional magnetic stripe payments. Once EMV cards are available, we will begin issuing them to members as part of our normal card replacement schedule.

Be sure to look for more communication regard to the Stop the Data Breaches campaign, Apple Pay™ and EMV cards as we get closer to the launch of each.

In the meantime, I wish you all an enjoyable summer.

Sincerely,

Chuck Purvis

Chuck Purvis, President & CEO

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