The Credit Union Credit Card Processing Strategy Debate
The value of offering your credit union members credit cards has never and will never be in question. Credit cards have become a fundamental linchpin in consumer lending strategies for credit unions. However, not all credit card offerings and strategies are created equally. Specifically, the changing credit card industry makes selecting the best sourcing model more important than ever for credit unions. And in general, credit unions and financial institutions have two major options and several customizable solutions within each:
- Outsourcing credit card products and servicing to third-party vendors has been the long-standing, defacto option for credit unions.
- Bringing the credit card offering in-house is an emerging trend designed to unlock a bevy of benefits. An integrated payment system can give your credit union the ability to offer a safe, seamless, and simplified member experience when it comes to making credit card payments. Enhanced by an all-in-one, comprehensive system, credit union representatives are empowered to easily process card payments for loans in your branch or via phone call, obtain payments for account funding, acquire collection payments, and so much more.
It's clear that using an in-house, integrated credit card strategy offers a vast range of benefits. However, credit cards have unique characteristics that have long deterred credit unions from bringing them in-house, mostly due to outdated core systems. Even so, the benefits of upgrading your core and offering an integrated credit card strategy greatly outweighs the costs. Let's take a closer look at real stories from credit union leaders who have unlocked the power of an integrated card strategy with FLEX tech.
Generate Cost Savings with an Integrated Credit Card Strategy
Carrie West, President for Raytown-Lee’s Summit Community CU ($70 million) in Missouri, says that the reason their three branches converted to in-house credit cards was to provide better service to their 8,500 members. “Since 1992, FLEX has always offered us the right solutions for our members’ needs. Our conversion to FLEX’s In-House Credit Cards has been extremely successful in every aspect,” said West. “We are realizing monthly cost savings, can see everything we need to see in member data, and love having complete control of the system internally with back-end support. The best part is that it is so easy we no longer need a card coordinator on staff.”
In-House Credit Card Solutions Creates Multi-Dimensional Efficiencies
Todd Hilling, President and CEO of Sheridan Community FCU ($78 million) in Wyoming includes in-house credit cards in their list of integrated offerings for their 6,400 members. “The whole point of changing over to FLEX was to eliminate third-party vendors in an all-inclusive system,” said Hilling. “I have used third-party add-on products for credit cards in the past and to serve members we had to make a phone call or go to an outside website to gather information. Although we are finding monetary savings, the biggest benefit of FLEX In-House Credit Cards is the ease and efficiency of the system.” And these multi-dimensional improvements can help bolster virtually every credit union efficiency rating.
Elevate the Member Experience with In-House Credit Card Processing
Steve Dalecki, President & CEO of ARC FCU ($127 million) in Pennsylvania, has found that using in-house credit cards has solved many problems his credit union has experienced in the past. ARC serves 11,300 members across two branches. FLEX, known for embedding superior technologies into a single-core solution, has proven to reduce credit unions’ core system complexity and IT resource requirements to less than half of today’s industry standard. This advantage benefits credit unions of all sizes, whether deployed as in-house, cloud or a hybrid of the two.
Dalecki explains, “Although we were able to offer real-time support with debit exchanges, our old third-party credit card program did not work at all,” said Dalecki. “FLEX’s one-stop-shop has made it much easier for our front-end staff who can now see balances, activity, and information live. In addition, we have saved a few thousand per month on the expense side. It is so nice to have everything integrated through the FLEX core system.” However, the cost savings are just the beginning. With better access to better data, member representatives will be better positioned to cross-sell credit union products and deepen the relationship with members.
What's the Bottom Line on FLEX Integrated Credit Card Solutions?
The FLEX Credit Card solution integrates card ordering and card loan servicing seamlessly into the core, rendering substantial cost savings and efficiency in serving credit union members. It also empowers members and staff with real-time transactional access to card account information through mobile banking, eStatements, eAlerts and various other core service channels. Minimal third-party access is still valuable for fraud protection and chargeback services at a substantially reduced cost.
While most credit unions on FLEX tout better member services and operational efficiency as the reasons for switching to in-house credit cards, many are also witnessing direct and substantial savings to their bottom lines. Credit unions are realizing an average of:
100 percent savings on what they paid to third parties for outsourced receipt and processing of payments,
50 percent on card statement services,
20 percent on marketing for an overall saving between 35 and 50 percent.
These credit unions also achieve savings through marketing and business intelligence, as they now have the ability to analyze and cross-sell against the card information and transaction activity maintained in their core lending database.
Unlock the Power of Core Integrated Card Management
For some credit unions, the world of accepting card payments can seem overwhelming. For this reason, FLEX has partnered with Beyond, a leading provider in the payments industry. Integration with Beyond Payments provides credit unions with the ability to process card payments in-branch and over the phone for
- Loan payments,
- Account funding,
- Collection scenarios, and
Best of all, these transactions can be seamlessly performed within the FLEX core system. Our aim is to help make the member payment experience as seamless as possible. Integration with Beyond meets this objective and creates new efficiencies for our credit unions. Every step of the payment process can be performed within the FLEX core system.