Credit Processing Solution Choices

With the current economic environment and recent legislative enactments, credit unions are under increasing pressure to find new sources of revenue and maximize existing sources. Certainly credit card issuing is among the leading potential sources of income. Central to this decision is whether a credit union should select a pass-through (internal) credit card processing solution or a fully outsourced solution.

The key difference between the two is that with pass-through, the credit union's host platform is the system of record for the credit card accounts. With outsourced, the processor's platform is the system of record. In both processing scenarios, the credit union has responsibility for underwriting and carrying credit card loan receivables. Using a pass-through solution, the credit union typically handles all transaction authorization and posting, along with back room services, such as cardholder member servicing and collections. With the fully outsourced solution all processing is delivered by the processor.