U.S. Central and Payment Systems for CUs taking on the Web together

TAMPA, Fla. and OVERLAND PARK, Kan. - There's nothing new or exciting about credit union firms aligning with technology vendors to offer CUs and CU members new high-tech tech services. But a just-announced alliance between U.S. Central and Payment Systems for Credit Unions is one of the few alliances that pairs two non-tech credit union firms that are planning on delivering technology solutions to credit unions. Corporate Network eCom, LLC, (CNE) a U.S. Central subsidiary, announced an alliance with PSCU that will focus on marketing and supporting CNE's Internet banking product, Memberstreet. The alliance brings together two major credit union players that only serve credit unions and are completely credit union-owned. While both organizations are known in the industry for their high-tech shops, they both earn their living in other areas. PSCU supports credit union debit and credit card programs, and U.S. Central is the wholesale corporate for the corporate network. Both are relatively new to the Web world from a product standpoint, but in recognition of the Web's growing impact on the industry both have formed groups to market Web products. U.S. Central's board agreed to form an e-commerce CUSO (Network eCom) at their annual meeting last June and PSCU has just announced that it is forming an e-commerce division known as ePSCU. "We believe U.S. Central and PSCU are natural partners philosophically. I think for credit unions evaluating whether they want to get into electronic commerce or not, who they partner with is significant. Look at U.S. Central, which is 25 years old, and us at 23 years old and with both organizations totally owned by credit unions, there is some staying power there," said David Serlo, president/ CEO of PSCU. There are also some significant economies of scale in play here with the size of both organizations. U.S. Central has roughly $27 billion in assets and serves 36 corporate CU members, while PSCU has 510 member CU owners and serves 5.5 million credit/ debit cardholders. Serlo hopes the alliance will instill trust in their Web efforts among credit unions. ePSCU will leverage its back-office support experience from PSCU to provide 24x7 back-office support for credit union members using eCom's Memberstreet product. PSCU has a 300-seat call center center in St. Petersburg to support some 5.5 million cardholders. According to Tom Miles, chief technology officer for PSCU and who will head up the ePSCU unit, about 20 PSCU call center professionals will be "webbified" to provide support for Memberstreet. Miles said this specialized unit of call center professionals is a faster, more efficient way to provide Web support for Memberstreet. Instead of having to create an entire new call center, which credit unions would ultimately pay for, leveraging off PSCU's existing center will save both time and money. "The strategic play we see is that there's a void in the service end of the e-world. The 8 to 5 or 7 to 7 business model doesn't cut it," said Miles, who said credit unions offering Web products are looking for 24x7 support. Miles said PSCU has partnered with Cisco Systems and in.Vision Research Corp to provide the technical infrastructure and tools that will become the backbone of ePSCU's Web call center. Using Cisco's Web Line, ePSCU Web support professionals will be able to see the same screens members using Memberstreet are seeing. "One of the big issues in back-office support over the Web is knowing what the consumer is seeing and doing," said Miles. With Cisco's product a member can click on a button to call the call center and if they have a second line they can talk to the rep while they are discussing support. Nothing new there, but Cisco's products lets the two parties toss screens back and forth so the call center agent knows exactly what the member is looking at. There's more to this deal than just the Memberstreet Internet banking product, however. There are some broader implications that may not be realized right away, said Serlo. One being the integration of PSCU's 5.5 million cardholder accounts with Memberstreet. Conceivably, PSCU's Credit Card Exchange Server, which allows host systems to retrieve credit card account data, could be integrated into Memberstreet. This would give credit union members who have credit cards from their credit unions through PSCU, access to their account statements within home banking. Accessing credit card account data over the Web is not revolutionary by any means. Many credit card firms offer online account access, but having that account access within the Internet banking system is unique. Another application of the alliance could come into play when a credit union considers selling its credit card portfolio. Serlo said most credit unions sell their portfolios to large commercial banks. "Credit unions are getting hammered with solicitations from large banks to sell, and more and more credit unions are selling those portfolios," said Serlo. Serlo said credit unions looking to sell their portfolio could consider U.S. Central or another corporate CU in the corporate network. PSCU would then be in the position to provide the back-office support for the portfolio. ePSCU has announced some other alliances that show just how serious it is about meeting credit unions' Web needs. ePSCU signed an agreement with bill pay and presentment firm CheckFree to bring bill presentment to credit unions. As an EBPP sponsor on the Checkfree platform, ePSCU will present credit union bills on a Web site developed and maintained by ePSCU and provide the back-office support for members using the site. ePSCU's Web call center staff will provide support for member inquiries into the bill presentment. ePSCU is working with its member CUs that already have contracts with CheckFree to terminate them and transfer them to PSCU's contract so they can take advantage of PSCU's volume discount. Miles said ePSCU will be pushing the bill presentment offering of CheckFree more than the bill payment product because eCom already has an alliance with Princeton eCom for bill payment services. Serlo said at this point ePSCU will remain a division of PSCU but down the line the unit may be spun off as a subsidiary and there could be some more permanent structural agreements with U.S. Central. At press time, U.S. Central officials were attending the corporate's annual meeting and could not be reached for comment. -pgentile@cutimes.com