Pat Riley, considered by many to be one of the best NBA coaches of all time, once said, "Look for your choices, pick the best one, then go with it." Wise words for those involved in professional basketball--and for credit unions looking for the right EFT network.
To attract today's highly mobile consumers--and enhance the likelihood of becoming their primary financial institution--many credit unions are looking for a full-service EFT network that is both affordable and offers member convenience. Along with traditional ATM cash withdrawals, members today want the ability to cash checks and make real-time deposits, money transfers and loan payments.
It should be an easy task to find the right network--the market is crowded with them. But, as Coach Riley suggests, you should choose wisely.
By carefully examining the various options available, comparing and contrasting features, and asking lots of questions, you'll more likely come out on the winning side. Here are some tips to help:
Know your costs...now and a year from now. Sure, credit union vendors get creative with marketing offers and special promotions. All businesses do as they are effective tools to grow business and survive in a competitive marketplace. But always read the promotion's fine print carefully. Are the fees quoted available for a limited time only? What happens when the promotional period ends? What, if any, unseen surprises might you anticipate--and what will they cost your credit union?
Consider the full court when comparing EFT network costs, rather than focusing on the short-term offers. If you sign a multiyear contract, be clear about the fees associated with it--today and next season.
Understand your opportunities to grow income. Study the competition and evaluate your network relationships so you can score with a vendor that ensures the highest revenue from acquired and point-of-sale transactions--and the lowest fees per issued transaction. In other words, what can you do to maximize your interchange revenue and minimize your interchange expense? Which offers the lowest transaction fees and the best interchange rate? Look for a network with team spirit--one that works in the best interest of your credit union and your members.
Remember, it pays to work with a credit union CUSO--you receive the profits!
Maximize coverage and services based on your members' needs. Before signing with any EFT network, make examining relevant member data part of your game plan. What are your members' spending patterns? What kinds of transactions do they perform on the run? Are they centered in a small region or even a few neighborhoods? Or are they spread out in several states or several countries?
It used to be that credit unions had to belong to multiple networks to provide the right coverage for their members: local, regional, national or even international. They also needed several networks to provide the specific services their members wanted, such as surcharge-free access and deposit sharing. Not any more. Today, you can have the winning combination with one or two networks to ensure surcharge-free coverage across the street or across the country and to offer a variety of transaction services.
It's vital to consider the physical location of network providers' ATMs: Are they in high-traffic areas to attract more foreign transactions or conveniently near the places your members often shop? And again, consider member patterns: If several networks serve your state or region, is there a good reason to belong to multiple providers? Why not pick the one with the best service and lowest fees, saving costly processor-related fees?
Know where your ATMs are located. It's no secret that credit unions and banks are rivals in the financial services arena, with taxation and field-of-membership issues grabbing headlines. With many banks aiming directly for your members, the best play is to stay out of the opponent's court and rely on network providers that exclusively serve credit unions--and don't rely on bank ATMs.
Another reason to avoid a bank or bank-owned processor: They pay dues to the American Bankers Association and are not friends of credit unions.
While some EFT networks may be independent of banks, make sure you know where their ATMs are located. Many count bank locations in their numbers. If a bank is included in your list of locations, it's easy for members to look to that bank for other financial services, as well. Again, look for a network with ATMs handy to your members, such as convenience stores, gas stations, airports and shopping centers. These locations add value to your ATM program and make your credit union even more appealing to current and potential members.
Once you've assessed various networks and selected the one or two that work best for your credit union and your members, don't sit on the sidelines. Keep your playbook current. Because technology, geography and member behavior are always evolving--you'll need to stay up on the latest moves to make sure your chosen network or networks continue to perform.
The choice is yours. Game on.
Stan Hollen is president/CEO of CO-OP
Financial Services. He can be reached at
800-782-9042 or email@example.com