When CU*Answers first introduced an online credit card program, adoption by credit unions was slow. But over the years it took off as credit unions saw the value in making the switch. And yet, still there are those hanging on to their off-trial balance credit card portfolio, reluctant to make the switch. Despite its tendency to save credit unions anywhere from 32%-42% off their monthly bills. So why aren’t they moving their programs online?
The misconceptions of an online credit card portfolio
One of the common things I hear is that when credit unions talk to the processing vendors, they are being convinced that moving to an online platform will cause more work for the credit union resulting in the need for additional team members. In our experience, this is not true. Often, they are referring to chargebacks.
However, the chargeback process works in the same way as debit cards. The credit union reaches out to their vendor and completes the paperwork needed for Visa/MasterCard (which is being done on either platform today). While Visa/Mastercard are researching the transaction, the credit union decides if they will be providing provisional credit to the member. If so, a member account adjustment is made for the credit card loan and when the results come in, the transaction amount is moved from a holding general ledger to a loss general ledger or is added back to the member’s loan.
Reap the benefits of a switch
When a credit union chooses to start a credit card program and/or move from one vendor to another, always talk to your core provider. In the case of CU*Answers, by talking with us we can walk you through what the online program will look like for your team internally and for your members.
When you choose to move to an online credit card platform there are so many benefits to your credit union and your members. For example, members will be able to see their loans while in online banking. They will be able to see their account and process transactions real time. Your members will be able to make payments online, see their balance, see what’s available, see what’s pending.
The credit union benefits by being able to have their loans on their books on the core for income and balance statements. You only need to log into one database to see your loans and assist members with any questions. And the CU has the ability to set up and run its own promotional campaigns typically without additional costs which could promote new cards and card usage. Plus, the credit union gets all the added reports and dashboards built into the system.
So don’t be scared to consider moving your credit cards online, make sure you are talking to all parties before making your decisions. You could find savings for your credit union, ease of credit card processing for your members, access to seeing the accounts in online banking and mobile!
