Michael Kelly, the new CEO at PSCU Financial Services believes credit unions need to move swiftly to meet the challenges they face both from other financial institutions and increasingly from non-financial institution competitors. And he believes the payment CUSO's role will be to help CUs do that.
Kelly had been a payments executive at Fiserv and a relative unknown to many CUs before accepting the job at PSCU and he credited his awareness, bordering on obsession, with the changing payments landscape in part for getting the position.
“The top 20 banks, well they are really on their own,” said Kelly, who reiterated his observation that, when it comes to payments, community banks and credit unions often find common ground and that it’s non-financial institution organizations entering the payment space that should cause both CUs and banks to lose sleep at night.
Kelly had several examples of companies in mind, including Starbucks. The popular vendor of coffee and atmosphere has implemented a prepaid card that users can access via an app on their smart phones. The result has been, essentially, the ability to cut financial institution, whether bank or credit union, out of a swipe from a routine transaction.
“The most you might get is an ACH transaction, usually once a month,” Kelly said. “Admittedly the amount of the transactions are not large, but I view Starbucks as the canary in the coal mine of where payments are headed.”
He also pointed to Target. As part of taking the job at the Florida-based CUSO, Kelly had to move his family of four to Florida. As part of the settling in, Kelly said he went to Target where he was offered a Target debit card. The card offered a 5% discount on anything he used it for and he noted that was bound to get the attention of some consumers.
“Increasingly Target is seen as a one stop shop for consumers. I can get groceries there and many other things. As a consumer, that 5% discount could be seen as pretty compelling,” he noted