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SAN DIMAS, Calif. -Who would have known a purchase card could be such an important asset for credit unions, but based on the performance of Procura LLC’s PurchaseONE, it can be. A purchase card is a payment vehicle that can replace the typical accounts payable method, said Dennis Toda, vice president, operational integrity for WesCorp. Toda is WesCorp’s executive sponsor for the development of the PurchaseONE card. Earlier this year WesCorp teamed with PSCU Financial Services, MEMBERS Development Company (which is owned by CUNA Mutual and credit unions) and Credit Union Financial Services Limited Partnership to create the Procura CUSO. Procura is owned equally by the four entities, which each contributed $200,000. According to Toda the program kicked off in June and 11 credit unions (see listing) have signed on to use PurchaseONE. Procura had set a goal of 10 by year-end. A purchase card is essentially a commercial credit card, and as such is based around interchange as a consumer card is. “The issuer who owns the BIN (batch identification numbers) has the right to that interchange. That’s all well and good if you’re greedy. We’re taking that and applying the credit union philosophy of sharing,” said Toda. In this case WesCorp owns the BIN. PurchaseONE users get what’s known as a “spend rebate.” They have to spend between $1.2 million and $2.5 million in a quarter to get money back. They can get up to 100 basis points per dollar. Spending at least $1.2 million a quarter may sound hard to do, but Toda said when you consider things like data processing contracts, facilities work, ATM suppliers and other high-dollar transactions, many CUs can reach the threshold. Credit unions can centralize the majority of their vendor payments through the purchase card, thus all the branches can use it to help rack up payment volume. Toda said to get a PurchaseONE card credit unions only need to make a one-time payment of $12,000. Toda said when he’s explained the PurchaseONE card to some CFOs and other CU execs they think it’s “almost too good to be true,” so they’re hesitant. Toda calls it a “no-brainer” for most CUs. He expects some $6 to $7 million will be spent on PurchaseONE this year and by next year it will grow to $50 to $60 million. “Within two or three years from now it could be hundreds of millions of dollars,” said Toda. He said with CU margins under duress, this is one more way to get some money back. Teachers CU, South Bend, Indiana, has been using a purchase card for three years and is spending to the tune of about $11 million a year. That’s about 40-60% of their accounts payable, which is typical for purchase card users said Toda. The rebate is one advantage, but PurchaseONE also cuts down on the paper-intensive accounts payable process at credit unions. PurchaseONE is integrated into a credit union’s general ledger to make payments easier. A firm called Works out of Texas handles the technology. Toda said, aside from a credit union having to extract files from accounts payable, there is minimal impact to a CU’s IT operations because PurchaseONE is Web-based. Works builds the purchasing authority hierarchy of the PurchaseONE card however the credit union wants. For example all branch managers may have full authority, while other employees may only be able to buy from certain vendors. So why can’t a credit union just get their own purchase card? It’s not easy to do. Processors want users to have in the neighborhood of $100 million in purchases and a few thousand users to issue them a commercial BIN. In this case, WesCorp owns the BIN and along with the other Procura owners has established the spend-rebate parameters (see chart). [email protected]

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