How Enhancing Payment Processing Can Help Credit Unions Offer Free Bill Payment to Members

As large banks continue to announce that they are offering free bill payment, it becomes critical for credit unions to stay in the game and find ways to compete. By converting their bill payment systems to an enhanced processing service, many credit unions are lowering payment processing costs, streamlining their back-office operations, and realizing fewer errors and claims. Some credit unions are even finding that converting their systems helped them lower costs enough to offer bill payment free to members.

 

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As large banks continue to announce that they are offering free bill payment, it becomes critical for credit unions to stay in the game and find ways to compete. By converting their bill payment systems to an enhanced processing service, many credit unions are lowering payment processing costs, streamlining their back-office operations, and realizing fewer errors and claims. Some credit unions are even finding that converting their systems helped them lower costs enough to offer bill payment free to members.

MemberGateway is a back-end payment processing service available in the MemberStreet® line of products offered by Corporate Network eCom, LLC (eCom), a subsidiary of U.S. Central Credit Union. eCom works with corporate credit unions to provide electronic bill payment services that appeal to the fast-growing population of bill payment users.

eCom's intention behind MemberGateway was to develop a product that eases the burden of bill payment processing and lowers costs. Dubbed the ''backbone of a credit union's bill payment system,'' MemberGateway facilitates payment processing for credit unions that process a large number of bill payments. By working with these credit unions and quickly growing volume, eCom can pass the savings along to other credit unions - both large and small.

Most credit unions using MemberGateway have experienced increasing electronic payment percentages, decreasing the number of payments that are processed by check - a more costly method. The benefits of lower costs, improved service and fewer errors are passed down to the credit union's members - often enabling credit unions to provide free bill payment to members. Wright-Patt Credit Union, Inc., based out of Fairborn, Ohio, is proactively passing these benefits on to its members.

''We were able to eliminate the monthly fees we had been charging our members for electronic bill payment services, and became the only financial institution in our market to give the service away free of charge,'' said Doug Fecher, president/CEO of Wright-Patt. ''In one year our volume of home banking users has doubled. Our bill pay users increased from fewer than 500 when we charged a fee to more than 2,400 active users. In May, 2002, we processed a total of 4,030 electronic payments; in May 2003, we processed 17,776 payments.''

MemberGateway also delivers enhanced reporting and research capabilities with its administration tool, BackOffice. Fecher explains, ''We now have the ability to research member payments. Under the former system, they handled all billing questions. We can do it faster and better, so our member service in the back office has improved. We are pleased with the system, and feel it gives us a market advantage others so far have not been able to copy.''

Credit Union of America , based in Wichita, Kan., wanted to improve its bill payment operations and member service when it was time to convert to another system. Like many other credit unions today, Credit Union of America also wanted a product that promised efficiency, reliability and accuracy.

''When we were looking for a replacement bill payment provider, we decided that we needed 1) better delivery time on bill pay transactions, 2) better back-end service on bill pay problems, 3) better reporting, and 4) a company who could do it right the first time,'' said Emma Slusser, electronic services manager with Credit Union of America.

eCom also has found a way to custom-fit MemberGateway to a credit union's needs. Great Lakes Credit Union, of Chicago, was looking for a system to automate bill payments which were already a part of its online banking system. The credit union currently is implementing the new bill payment system using MemberGateway.

''We are looking forward to increased member bill-payment participation from our new improved system,'' said Clem Richau, vice president of information and payment technologies at Great Lakes Credit Union.

Whether the reasons for a credit union's conversion to MemberGateway are pricing, service, claim resolution or efficiency in operation, eCom will maintain its broader vision to practice the credit union cooperative spirit. By leveraging economies of scale, we all benefit. And that alone is worth logging on to.

MemberGateway is offered through corporate credit unions. For more information about MemberGateway and other MemberStreet solutions, contact your corporate credit union, visit www.memberstreet.com, or call Nate Truelson, eCom's national sales director, electronic bill payment services, at (888) 656-4050, ext. 6126.

 
 

Aug. 11, 2003


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