Payments processor Capital Services, known until recently as Capital Card Services, works with about 130 credit unions, and has been hidden behind a relationship with Fiserv. Now, it has begun offering its services under its own name.
Keeping Fiserv as the lead firm in the relationship left Capital Services entirely behind the scenes and almost unknown to the credit unions.
“Credit unions working through Fiserv would recognize they were working with Fiserv but not with us,” explained Capital Services CEO Chuck Hendrickson.
Capital Services decided to begin approaching credit unions in its own name after it became clear that credit card use had begun to rise and that more credit unions and community banks were moving back into card issuing, Hendrickson said.
In addition to the credit union accounts it processes with Fiserv, the 200-employee firm manages card accounts for banks in Minnesota, Iowa and South Dakota through subsidiaries of its parent company, Farrar Banking Group.
Together, between the work with Fiserv and for the subsidiary banks, Capital Services says it manages 670,000 card accounts for 150 client institutions and worth roughly $150 million in balances.
The firm’s record and volume with credit unions and banks is important, Hendrickson said, because the familiarity with issuer priorities and perspectives is part of what will make Capital Services offerings important and appealing to credit unions.
“We don’t think like a processor,” Hendrickson explained. “We think like issuers, and we understand what issuers need when they try to manage card portfolios and make decisions about card accounts.”
Capital Services has a body of executives with long experience with card management as issuers as well as a analytical software package called the Vintage Profitability Reporting System (ViPR, pronounced viper) that provides data about card accounts to help card issuers make decisions about those accounts.
According to Hendrickson, ViPR allows a credit card executive to determine account profitability and predict account behavior. ViPR works to allow card managers to see both card portfolios from the highest level but more easily from the account level as well.
ViPR essentially allows the financial institution to have access to ongoing credit scorecards about each card account, a process which builds on the Vantage credit score and then adds further analysis.
“What Capital Services does better than anyone else is to offer the ultimate in visibility into your payment products portfolio,” said Hendrickson. “Our range of tools, particularly our ViPR system, enable a financial institution to analyze its portfolio at a very granular level and make the changes necessary to maximize returns.
“We have combined our portfolio management experience with analysis of massive volumes of customer, payment, and portfolio performance data,” Hendrickson explained. “That has enabled Capital Services to develop proprietary, market-proven scorecards that are invaluable to financial institutions.”
The combination of issuing experience and ViPR allows the firm to more efficiently combine the processing and consultancy approaches offered by other payments processors already in the space, Hendrickson said.
In addition to portfolio analytics and risk management, the firm also offers a full suite of compliance support services; customer support services such as call centers as well as fraud prevention services.
The company takes compliance, particularly in the wake of the CARD Act very seriously, Hendrickson said. The company has a dedicated department that monitors regulatory changes so that client institutions can be sure they are compliant and in control.