JACKSONVILLE, Fla. – A $39 million, 6,500 member federal credit union in Florida is using card numbers, but not the cards themselves, to generate roughly $50,000 per month in interchange income, according to the credit union's CEO and the credit union's data processing firm. The processing firm, Indianapolis-based Remember Data Services (RDS) is calling the product "virtual cards" and, based on the two-month experiment with the Florida based J.M. Associates Credit Union, says the "card without a card" product can streamline accounting procedures and address security concerns in many different applications. The Jacksonville-based J.M. Associates' primary sponsor is the JM Family Enterprises Inc and the businesses it owns. JM Family Enterprises and the subsidiary companies it owns are heavily involved in automobile importing, sales and service in the southeast. The credit union's members are the employees of these businesses, according to Jim Ryan, CEO of the credit union. One JM Family business that is also a credit union SEG services the warranties on new and used cars, those sold by a JM Associate firms and others, Ryan said. The process of paying and accounting for the firm's warranty transactions was badly in need of streamlining and the credit union turned to RDS, its data processor, for help. RDS offered its "virtual" debit or credit card, which then was about a year old. Using virtual cards allows the warranty firm and credit union to efficiently obtain the benefits of a debit or credit card transaction without actually have to take the time or spend the money on the actual plastic card. In the case of the warranty firm it works like this, Ryan explained. The warranty firm has a call center which takes calls from members who believe they have a claim under the warranty. If the call center agrees that they actually have a claim, the call center finds out if the auto-repair firm will take a check for their work. Some will but many, if not most, won't, Ryan noted. If the auto-repair firm will take a credit card transaction for the work the warranty firm calls the credit union with the amount of the work as well as an invoice number or job number for it. Using RDS, the credit union is then able to generate a debit card number, tied to the firm's credit union account, which is limited to only the amount of the job and has the job number to help track it. "Most people are aware that VISA cards have 16 numbers," Ryan said, "and that the first five numbers are the BIN number. Well, that leaves us 11 numbers to play with and that is where we put the invoice or job number for the transaction." This approach, he noted, allows the firm to precisely track the transaction, linking it to the job and providing for additional security since the card is limited to the amount of the transaction. In addition, Ryan noted, the transactions, which are categorized as `card not present' transactions, draw the highest rate of interchange, almost 2% per transaction. That represents a significant income stream for the credit union, which garners the interchange from about $2.5 million in transactions each month from the "virtual cards," Ryan said, adding that the credit union expects the transaction volume to double over the next year. Jeff Lippens, director of RDS' Information Service Applications, said the firm had offered the "virtual card" product for about a year and said that the firm's 97 credit union clients had expressed an interest at the cost and time savings the "virtual card" represented. Lippens estimated the cost of a new actual card at between $1.00 and $1.50 but added that the turn around time from the time the card is ordered to the time it arrived could be two weeks. "With the virtual card the member is getting the card number they need in the same phone call," Lippen noted. [email protected]

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