SAN DIMAS, Calif. - WesCorp, the nation's largest corporate credit union, spearheaded the formation of a new CUSO designed to bring new products and services to the credit union market. In addition to WesCorp, the CUSO -dubbed Procura LLC - includes Credit Union Financial Services Limited Partnership (CUFSLP consists of 40 CU limited partners. Callahan Financial Services, a subsidiary of Callahan & Associates, is the general partner.), MEMBERS Development Company, LLC (which is owned by CUNA Mutual and credit unions), and credit union card giant PSCU Financial Services. The new CUSO is owned equally by all four entities. Each invested $200,000. The first product to be unveiled is known as PurchaseONE, a purchase card designed to make organizational purchasing more efficient. A purchase card runs on a credit card platform and operates on the FDR system just like a consumer credit card would, but it is not intended to be a revolving credit product; it settles monthly. P-cards as they are known, are designed to reduce costs, administrative burden and overall procurement lead time. As any credit union CFO knows, procurement records, authorization and all that goes into the process can be costly and time consuming. The purchase card can integrate directly into a credit union's general ledger, eliminating purchase orders and other paperwork. The interchange on the purchase card is high, and if CUs hit certain spending thresholds they earn rebates. WesCorp Vice President Dennis Toda said the great thing about the four organizations involved in this CUSO is they each have a dedicated credit union client base that they can call on to determine what needs they have. "There isn't a long laundry list of products we have in mind, but there's always the potential for many other things," said Toda. These ideas can either come from CUs, or be bounced off them by Procura. The inspiration for the purchase card actually came from a credit union, namely South Bend, Indiana-based Teachers CU CFO Amy Sink. She said p-cards can be used for high-value items, such as ATMs, which a regular Visa card couldn't handle. A credit union would typically have to cut checks for ATMs, but not with a p-card. "The benefit of the back-end is there are reporting structures for expense budget comparisons. Instead of a regular Visa, you see expenses on the back end, so there's never any `where did you get that' ", said Sink. She said the p-card has reduced Indiana Teachers' accounts payable checks by 30%, which saves money and time as there are no lost checks, double entries or non-payments. On the front-end, Indiana Teachers works with a firm called Works, that has a direct link to Visa. On the back end it is using PNC Bank's BIN (Batch Identification Number). Indiana Teachers will be changing to a BIN number for Procura in the coming weeks, and Works will be the front-end provider for Procura. P-cards aren't exactly easy to get. "People always ask, `how come I just can't get a p-card on our own.' We tried. We sold our card portfolio and wanted to use our FDR BIN," she said, but Sink quickly found out you need significant volume to qualify for a p-card. Sink says Visa requires $100 million spent on an annual basis and they want a few thousand users. The new CUSO will be able to bring that type of volume. All the dollars will flow through the CUSO's BIN and participating credit unions will share in the interchange income. Credit unions can also roll out p-cards to SEGs. Indiana Teachers is getting ready to do just that with a few of its SEGs. The interchange income will be shared among the credit unions using the product. Procura does not have a CEO, and says for now it will be using a five-person board of managers made up of representatives from each of the four owners. Sink will also be a member. -firstname.lastname@example.org
WesCorp Spearheads New CUSO Made up of Large Industry Players
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