ST. PETERSBURG, Fla. - Is Certegy one of the best kept secretsof credit union credit card processing? Sometimes it can seem thatway, even though company executives assert that the Alpharetta,Georgia-based card processor has begun working harder to helpcredit unions understand what it can do to help them manage theircard portfolios. "I will agree that in that [marketing] aspect, wehave had to make a cultural shift," said Steve Beckerman, a seniorvice president with Certegy. "We have had to begin being morepersistent about getting credit unions to understand what we can dofor them." Beckerman explained that, up until relatively recently,the card processor would announce a new program or service to itscard issuers, including credit unions, once and then not mention itagain. "Now we have to keep going back to them," he said. Thestakes of getting the message out are enormous. Of the more than6,000 financial institutions that process either cards or checksthrough Certegy, at least 2,600 of them are credit unionsprocessing card transactions. That means that Certegy processes thecard transactions for more than 55% of the roughly 4,700 creditunions that told NCUA that they had positive credit card balancesat the end of 2003. While Beckerman wouldn't speculate on what hadpreviously prevented Certegy from taking a more proactive marketingstance, he acknowledged that the growing pressures on credit unionsto better manage their card portfolios influenced the firm'sdecision to start pressing its products and services more firmly."Now is the time when we really have to step up to the plate," hesaid. The need for more proactive marketing came somewhat moresharply into focus when credit union card executives, whose creditunion's process with Certegy, recently toured the firm's St.Petersburg card facility. As a small clutch of card managers lookedthrough a series of plate glass windows facing a call center floor,a Certegy card services manager described the different levels ofcard services Certegy provided credit unions and their cardholders.The manager explained that basic service provides cardholder phoneservice 24 hours per day, seven days per week, mostly through aninteractive voice response system. Information covered includescurrent balance, available credit, payment activity and informationon the last five transactions posted. Customer servicerepresentatives assist cardholders with more detailed informationand person-to-person support. The next step up, premium service,offers basic service plus 24-hour fee reversal. Certegyrepresentatives can reverse fees under $25, including annual feeissues, late charges, and returned check fees. But the mostcomprehensive service, the VIP Service, provides all of theproceeding but adds the ability for customer servicerepresentatives to make credit limit decisions, handle PIN/plasticsrequests, change payment due dates and reissue accounts using acredit union's unique decision making criteria. In today's cardmarketing environment, VIP service is the gold ring, an approachthat can allow a credit union to let its cardholders to more easilyincrease their credit lines, and thus carry larger balances, aswell as better manage their overall accounts more easily. It canprovide the level of customer service that helps make thedifference between whether a credit union's card holds the coveted"top of the wallet" slot in a cardholder's wallet. But even asBeckerman and other officials acknowledged how important the VIPservice could be to credit unions seeking to better manage theircredit card portfolios, they also had to acknowledge that only 19of Certegy's card issuers, both banks and credit unions, use theservice, with another six on line to begin using it later thisyear. "That definitely shouldn't be the case," said Robert Bream,senior vice president with card services of North America, "butit's been a slow process ramping up the marketing effort andgetting it going." Bream pointed out that since he had taken onrunning Certegy's North American card services he had sharplyincreased the card services marketing budget and sought to make thefirm generally better known among both banks and credit unions."Heck, a lot of people who process with us don't even know we areinternational in scope and that we have facilities all over theworld," he added. Many credit unions don't know that Certegy hasservice facilities in the United States, the United Kingdom,Ireland, France, Chile, Brazil, Australia and New Zealand, Breamnoted and many don't know that a January issue of Forbes magazinenamed Certegy number 137 of the 400 best managed U.S. firms, a factBream revealed in a presentation to the Card Services for CreditUnion's 2004 annual meeting in St. Petersburg. But if Bream andBeckerman admitted that more credit unions needed to know aboutCertegy's products, they also noted that the firm has many goodproducts and services to offer, with still more on the way. Forexample, for as much attention is paid to credit unions sellingtheir card portfolios, Certegy pointed out to CSCU conferenceattendees that the number of card accounts lost to sales is only asmall part of those lost because the cardholder closed them orbecause they fell into inactivity or because they were neveractivated. "Last year, in 2003, we lost 250,000 accounts due tofinancial institutions selling their portfolios. But what reallysurprised us were the number of accounts, 1.4 million that werelost due to deletes and purges," Bream said. "And so whileportfolio sales are clearly an issue, what is an even greater issueis inactivity, dormant accounts." In response, Certegy hasdeveloped and begun beta testing a product that it hopes will beable to help card issuers address these accounts which representsabout 5% of Certegy's card base, according to Beckerman. "This is aproduct that, while we are still beta testing it, I am reallyexcited about," Beckerman said. The product, which remains yetunnamed, will offer a mix a rewards, incentives and other measuresfor 90 days that card issuers can offer their members who havestopped using the cards to get them to start using their card again- along with the usual measures credit unions can take to offercredit line extensions and upgrade cards when appropriate.Beckerman said Certegy had research which indicated this mix ofincentives can have a dramatic impact on a card portfolio, leadingto card reactivations from 25% to 75 or 85%, depending on how longthe cards had been inactive. This is an example of a program that,when it is rolled out, Certegy will probably market heavily to itscard issuers, Beckerman said, maybe by offering introductory offersor other incentives to help card issuers take advantage of it. "Webelieve all our products offer card issuers, particularly creditunions, the right sort of mix of turnkey services that they need tobe able to manage their card portfolios in a cost effectivemanner," Beckerman said. "Our challenge is to help more creditunions know about them." -

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