Chief executive leading drive to modernise credit unions replaced

Cusop’s chief financial officer to be appointed chief executive in coming days

The man leading the drive to introduce an electronic payments service allowing credit unions to compete more effectively with banks has been replaced. Kevin O'Donovan was widely expected to be reappointed as chief executive of the Credit Union Services Organisation Payments (Cusop) Ltd following the end of his contract at the end of the month. He was informed recently he would not be retained. It is understood Mr O'Donovan had been in negotiations over the terms of a new contract.

The company is moving to appoint Michael Keegan, its chief financial officer, to the top job.

Cusop is owned by the credit unions and was set up to develop and roll out a single-payments platform for any of the State’s nearly 400 credit unions looking to provide an electronic payment service to members.

The Irish League of Credit Unions and the individual credit unions each has one director and one trustee on the Cusop board.

Credit unions using the service can organise electronic payments to and from credit union accounts and other banks. members can also access their accounts using a debit card. Payments from an employer or social-welfare office can also be paid directly into a credit union account under the system by electronic transfer.

Mr O’Donovan, who had worked in a variety of roles at Bank of Ireland, was appointed Cusop chief executive in April 2013. Six months later, the Central Bank granted the not-for-profit group a licence to operate the electronic payments service. Credit unions, which have been struggling under increased regulatory oversight and reduced demand for borrowing, saw the move into electronic payments as a way to compete more effectively with banks at competitive rates for their members.

In the past two years, it is understood about 80 credit unions have signed up to use the service. In August, the company celebrated one million electric transactions since its introduction.

At the time, Mr O’Donovan said the company was recording growth of 55 per cent this year in the number of transactions being processed by the platform. “The volume growth reflects the accelerated connection of credit unions to CUSOP and we are now processing over 200,000 transactions a month. Reaching this one-millionth milestone so quickly highlights the credit unions’ support and confidence in this movement-led initiative.”

However, it is understood the credit union movement had concerns about Cusop’s progress in signing up member credit unions, with the target, understood to be about 150 members, still some way off.

Mr Keegan, who is expected to be formally appointed chief executive in the coming days, is also a former banker, having worked with AIB and its Polish subsidiary Bank Zachodni WBK for many years.