BancVue, the product development and marketing firm dedicated to helping CUs and community banks compete with large banks, has announced a deal with card processing giant TSYS that could make it a significant player in the already crowded CU card processing market.
The arrangement will allow BancVue to offer TSYS card processing to its client CUs, the companies said.
"We couldn't be more excited to bring TSYS' best-in-class card products to the community financial institutions marketplace," said Gabriel Krajicek, CEO of BancVue.
"This partnership will go a long way toward supporting our mission of bringing innovative and market-ready products that empower our clients to offer card products that are competitive with the megabanks," he added.
TSYS supports a variety of card programs, including credit, debit, commercial, private-label, prepaid and loyalty or rewards programs.
"We chose BancVue as a partner not only for of its history of innovation but for the company's strong client relationships and experience as well," said Bill Hunt, group executive for TSYS Program Solutions."The relationship is based on our two companies' common mission to deliver nothing but the best products and services to our clients."
The move comes on the heels of the company's purchase of an FDIC-held credit card portfolio that the insurer acquired after the Office of the Comptroller of the Currency closed an Atlanta-headquartered national bank. At the time of its closing, the Silverton Bank NA had roughly $4.3 billion in assets and served as a bank for other banks and not the general public, according to the FDIC. Silverton offered card processing and agent card issuing as one of its services, along with brokered deposits and other investment services. The takeover left the insurer with an agent-issued card portfolio that represented card accounts from about 700 financial institutions, all of them banks.
Purchasing the portfolio enabled the marketing firm, still relatively small, to more than double its client base, according to Krajicek. Prior to the purchase, BancVue had almost 700 clients, more than 300 of which are credit unions, Krakicek said.
BancVue specializes in developing products and services that credit unions and community banks can adopt to effectively compete against much larger national banks. The most well known of these has been the Kasasa rewards checking program that combines debit card usage and electronic banking to enable participating banks and credit unions to offer significantly higher interest rates on checking accounts.
The company saw the TSYS partnership and Silverton portfolio purchase as being part of the effort to bring its same attitude and competitive structures to credit cards as well as other financial products and services, Krajicek explained.
BancVue consumer research has found that if a community banking institution does not offer their own branded credit cards, then in the mind of the consumer that financial institution can't really be competitive when it comes to products compared to a mega-bank, said BancVue chairman Don Shafer, "Our commitment is to deliver market-ready solutions to our clients that will shatter that perception," Shafer said at the time the firm announced the Silverton portfolio purchase.
Shafer said his excitement comes from knowing this acquisition will help BancVue empower its client partners to compete with megabank-branded credit cards.
"There are thousands of community financial institutions across the country that want to be full-service providers to their accountholders," said Shafer, "and having their own branded card will help them be just that. In fact, we intend for these cards to become top of wallet, literally replacing the cards branded by the megabanks."
Krajicek explained that BancVue saw the TSYS partnership as the next logical step in the company's progress and said it would allow BancVue to bring a card processing platform heretofore only available to the largest financial institutions to credit unions and community banks.
"For years, TSYS was known for serving only the largest financial institutions and retail card issuers," Krajicek said. "Now that they have changed their policy, they really aren't set up to service those sized institutions as much as we are."
"The partnership with TSYS allows BancVue, in a sense, to come in on the ground floor of the card processor's work with smaller institutions. That, combined with the flexibility and power of the TSYS card platform, will enable it to tailor the card programs in ways that credit unions uniquely need," he added.
This could show itself most quickly in the development of rewards programs that could cover not only credit card transactions but stretch to debit and checking transactions as well along with savings accounts and loans. With Kasasa, Krajicek said BancVue already had experience with developing and managing participation and rewards programs. This will give them an edge in helping to craft a card program based on TSYS capabilities.
"One thing we have over the other card processors working with credit unions," Krajicek said, "is that we are not a card processor. Our strength is in market research, starting from finding out what the consumer wants and then helping credit unions and community banks craft the products and services that meet those needs," he said.