CSCU Rethinks Its CU Card Role to Take on More Responsibility
WASHINGTON -- CSCU President Robert Hackney wants everyone to know that the association's days of being seen as playing a more junior role with card issuing credit unions have ended.
"From now on, CSCU will play a much larger role in the relationship between the majority of credit unions and their card processor," Hackney said in an interview from the trade show floor of CUNA's Governmental Affairs Conference where the organization made its announcement. "This is huge."
From its launch in 1988, the association of credit unions that process their cards with FIS has generally played a smaller role in the credit union card processing space than other organizations, even though a significant majority of credit unions that issue cards process those transactions with the processing giant.
This is because the association's role had generally been limited to helping credit unions aggregate their card processing demand and win better pricing from FIS. That began to change in the middle of the last decade, when CSCU began to actively educate credit unions in better card management practices, but it still kept a relatively passive stance compared to the card processor.
All that ended, Hackney said, on Feb. 22. Going forward, CSCU will take on the sole sales responsibility for offering FIS credit and debit card processing to credit unions, he said. He added that the association will bring on a sales staff, which it has never had before, and step up its card portfolio consulting in the move. FIS's role will be to continue to work with credit unions to meet their day-to-day account needs, while CSCU will take over everything else.
Roughly 3,100 of the 4,100 credit unions that offer credit cards are members of CSCU and use FIS for their credit card processing, according to Hackney, but a significantly smaller percentage of those 3,100 process their PIN debit transactions with the company, he said.
"With three processing platforms for PIN debit now, we think we are in a particularly strong position to offer credit unions meaningful savings on their PIN debit processing," he said.
FIS is a multiproduct processing giant that, in addition to card processing, also offers core data processing, ATM driving, call center services, prepaid cards and many other services. The change will make CSCU responsible for marketing roughly 12 to 15 of the roughly 352 products and services FIS currently offers, Hackney said.
The move will mean more staff for the traditionally conservatively sized organization as it seeks to build a sales force as well as a new office or headquarters space, Hackney said. He added that the model the two organizations have adopted is akin to that of Financial Services and its processing partner First Data Corp, but with significant differences, since PSCU handles more of the day-to-day account management for its member CUs than CSCU would. Further, PSCU has also branched into other product and service lines that have little to do with card processing.
But Hackney hinted that since CSCU would be in charge of much of the relationship between FIS and its client credit unions, the organization would be open to taking on additional responsibilities to help further the relationship, such as developing a mobile banking platform.
"Certainly as our member credit unions seek to make the transition from members my age to members my daughter's age or my granddaughter's age, that is going to mean more electronic and more digital. Those generations are not going to write things down anymore, at least not routine things like transaction details," Hackney said.
Hackney declined to say whether CSCU or FIS initiated the change, but he pointed out that both benefitted from his organization taking on more responsibility. FIS employees currently selling card processing to credit unions would be reassigned to other product lines or client areas, he said.