ST. PETERSBURG, Fla. — PSCU Financial Services, the CUSO that processes card transactions for over 500 credit unions using the First Data card platform, will issue its highest patronage dividend on record this year, according to the cooperative.
A release from the cooperative did not specify how big the dividend would be, but said that it expects it to top last year's $23 million dividend.
In addition, the cooperative said it would get some of the patronage money flowing back to member credit unions immediately in the form of cuts to their fees for credit and debit transactions in the months of November and December and for the use of the cooperative's PayLynx online bill payment service. The cooperative will also repay some of its revolving fund certificates, which normally would fall due in March 2007, in December of this year.
"Of course we can't predict the future exactly or know what will occur, but going into the holiday season we look every bit on track with last year's performance," said David Serlo, president of PSCU.
Serlo attributed the good year in part to PSCU's members steadily adding accounts which, in turn, increases the cooperative's scale and lowers the per transaction cost. He also credited "the financial growth and success of our member-owners" and "an unexpectedly robust economy."
Serlo said PSCU decided to cut the transaction fees for November and December after determining that, even without that income, the cooperative would likely still make or beat last year's record.
The second strong year in a row brought up the sensitive question of pricing and whether, as a cooperative, it is better for PSCU to make big patronage payments or to cut prices instead.
Serlo cast the question in terms of what he called the "delicate balance" between being responsible in pricing and running the risk of coming up short.
"Routinely, all the time, we review our pricing," Serlo said. "The marketplace demands we do that. As a cooperative there is a always a tension between keeping our pricing attractive and being responsible for our members."
Serlo said that often what gets lost in the pricing discussion are the ways PSCU seeks to add value to the basic relationship with its members in ways that do not hike the price. He cited as an example the Evolve graphic user interface that PSCU member credit unions can use as a gateway to the PSCU processing platform, an innovation which made something historically very difficult to use much simpler.
"Engineering Evolve wasn't free," Serlo said, "it cost us something, but we considered that part of the value we bring to credit unions who are our members."
He also cited PSCU's recent decision to begin offering 24/7 in-house fraud incident analysis as an example of a service for which, right now, the cooperative doesn't expect to charge extra.
"Of course that could change as we take the measure of what the fraud incident monitoring costs us," Serlo said. "But we have already determined that one of the ways large bank fraud protection and credit union fraud protection differ is that they have a live person 24/7 who can make decisions about turning off accounts. We think our credit unions should have the same protection," he said. –dmorrison@cutimes.com
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