As a credit union, you are competing for your members' business every time they visit an ATM, swipe a card or sign on the dotted line. To make sure payment transactions are fast, easy and secure for members, you rely on a complex array of processing technologies.

And if you have a proven track record with different vendors for debit, credit and ATM payment processing, you may be reluctant to “mess with success.” However, maintaining this multi-vendor paradigm may be holding you back.

According to Lynn Kneebone, director of national sales for CO-OP Financial Services, credit unions don't typically contract multiple payment processors by design. More often than not, it is a dynamic that occurs over time.

“As a financial institution, you may have first rolled out a PIN-based solution, then added signature processing with a different vendor, and eventually upgraded your ATM fleet with a third,” she said. “While all three solutions may be operationally sound, managing the complexities of these disparate systems can negatively impact both your service to members and bottom line.”

Here's why.

You may be overpaying. “Payment processing is a volume-based business,” said Ryan Zilker, business manager, product development, for CO-OP. “The more business you do with a provider, the more negotiating power you have, and the better your pricing is likely to be.”

Operationally, it's better to reduce and simplify. Moving to a single payment processor eliminates the need to balance and settle programs across multiple systems. Plus, your employees have just one system to learn and maintain. “This lessens the workload for employees and may allow you to reduce headcount as well,” said Kneebone.

Fraud detection is easier. According to Zilker, when you have one seamless view of your processing environment, it is easier to spot fraud trends. “As a result, you can react to the situation faster, minimizing the risks to your members,” he said.

Strategically, there's power in the data. “Consolidating payment processing allows you to mine data more effectively,” said Kneebone. “With data analytics, you can understand, at a very granular level, what your members are doing, how they are using your cards, and where they are using them. This allows you to pinpoint their needs and preferences, and offer promotions, rewards programs, and cross-selling opportunities accordingly.”

Your members prefer it. Zilker notes that having different debit, credit and ATM processing platforms can lead to a disjointed user experience, with too many portals and interfaces by today's standards. “To compete as a financial institution, it is important to provide a user experience that is very much in step with consumer expectations,” he said. “You need to make it easy for members to do business with you.”

So, how do you go about making the switch to one processor? Kneebone emphasizes the importance of adopting a long-term view. “First, take inventory of how your system functions today and determine how you would like it to operate in the future,” she said. “Weigh the upfront costs with the financial savings and growth possibilities of the transition over time, and then select an experienced processing vendor that can provide you with consultative services, employee training and other resources critical to the implementation.”

She added, “Understand who your stake holders are and what they need. And remember that technology changes quickly. Look for a forward-thinking partner in this arena to help you stay ahead of new technologies and successfully provide greater value to your members.”

Click here to learn about CO-OP's integrated debit, credit and ATM offerings.

Instant Insights /

The Case for Consolidation: Advantages of a Single Payment Processor

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