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SCHAUMBURG, Ill. – If your membership is as tech savvy as Motorola Employees CU’s is, you have to find new tech savvy ways to serve them. In late 2003 the $485 million MECU decided to give its members the ability to move money in and out of their credit union accounts via their online banking system. This is known as inter-institution transfers and back in 2003 it was rare among financial institutions. Some CUs have shunned this capability because studies show financials that offer this typically see more money go out than come in. MECU however said you can’t hold back members, you have to empower them to do what they want or they’ll go elsewhere. Since launching the product, branded as Money Movement, the CU has transferred $4.8 million. The average transfer amount made by an MECU member is about $800. It is powered by CashEdge, a leading funds transfer company that relies on the ACH network. $4.8 million is a huge number for what is still a fledgling tech offering in the financial industry, and it proved to MECU that many of its members would rather move money electronically if they could. “Considering our base is Motorola employees and their family members, we’re always looking to attract them with technology,” said Alethea Marselos, Marketing Manager for Motorola ECU. Currently 8.5% of MECU’s members use Money Management. The CU’s success with inter-institution transfers was helped by its eye opening 70% penetration rate with home banking. Also, 19% of its membership utilizes bill payment. So far there’s about a 50/50 split of inbound and outbound transfers. That may seem surprising, but Marselos said the CU’s low fee structure for all transactions doesn’t push members into doing more inbound than outbound transfers like other financials. “We didn’t want to try and influence how members used the product through pricing. You could do that by making outbound transactions higher than in bound,” said Marselos. At MECU, members pay just $1 for the standard three-day transfer. If they need a next day transfer, it goes up to $5, still lower than most banks. Citibank’s pricing structure on the other hand encourages inbound transactions, but not outbound. Citibank charges $3 for standard outbound transfers and standard inbound transfers are free. For next day service, it charges $10 for outbound and just $3 for inbound. MECU members are actually diverted to a Cash Edge site to make the transfer, but they’d never know it. The site is branded for MECU and more importantly, said Marselos, there is no separate sign-in. Once members sign in for online banking, they can access the transfer service. Members first have to be signed up for Money Management. For inter-institution transfers to work, CashEdge must verify accounts. One way it does this is through very small trial transactions. For example CashEdge will initiate a ten cent transaction to ensure the account is valid. But it also has new methods, such as verifying accounts against a database of commercial bank printers and using a person’s online banking credentials. CashEdge uses these same verification procedures online account opening product which allows a member to not only open an account online, but fund it online. University of Wisconsin CU was one of the first CUs to sign up for that service earlier this year. -

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