In a move seemingly aimed at creating a payments CUSO large enough to compete with PSCU Financial Services, CO-OP Financial Services and the The Members Group have announced a cooperative marketing and product development partnership.
Under the agreement, CO-OP will make a “strategic investment” in TMG, a payments and services CUSO affiliated with the Iowa Credit Union League. Executives with each organization declined to reveal the scope of the investment.
Both organizations will retain their management structure and independent product offerings, but each will also offer the other's products and services and cooperate on strategic marketing, planning and development, executives said in a Jan. 5 press call.
“With the combined forces of TMG and CO-OP Financial Services, we are able to provide credit unions with a single point of entry to the most innovative, tailored, cost-effective products,"said Shazia Manus, CEO of TMG.
“The investment of CO-OP Financial Services in TMG allows both companies to offer the best processing platform for each client’s unique needs,” said Stan Hollen, CEO of CO-OP. “CO-OP gains a full-service credit card system customizable to credit unions, and TMG gains additional products and delivery channels. Combined, the scale of processing is second to none.”
The partnership does not include TMG Financial Services, the card portfolio purchasing and investment arm. Nor does it directly involve CO-OP Shared Branching or the CO-OP Network of ATMs, though Hollen said these channels could be part of future product development. CO-OP Shared Branching uses the Next Generation Switch, a proprietary, sophisticated switch for its shared branching transactions that could prove compatible with the Dwolla payment network that TMG has been developing.
Reaction to the move has generally been positive, though PSCU Financial Services CEO Mike Kelly acknowledged that the organizations appeared aimed at creating an organization that could rival PSCU.
One credit union CEO enthusiastically approved of the announcement. Ronald Hance, CEO of Heritage Family Credit Union, a 32,000-member, $277 million credit union headquartered in Rutland, Vt., said that his credit union had been using each of the CUSOs for some time and that his staff found them both professional and reliable.He added that he thought both organizations would be benefit from the cooperation.
“I am definitely a movement kind of guy, so the fact that they are both cooperatives and they are cooperating more completely means a lot to me,” Hance said.