Posted by Alison Arthur on 16 Apr 2018
Credit Unions play a critical role in the American economy. They are distinct from traditional banks in their non-profit structure and membership model that promotes financial well-being across the entire cooperative. Eligibility for a Credit Union may be determined by several factors including membership within a defined group (military, school, labor union, etc.), residence within a specific geographical area, or employment through a particular organization. The cooperative is owned by its members and profits are returned to them through the Credit Union’s financial products. For example, rates on interest bearing accounts like personal savings tend to be higher while interest rates on loans and credit cards tend to be lower.
Many Credit Unions offer loans to their members, both direct and indirect. Examples of direct loans include mortgages, auto loans, and lines of credit that are issued by the Credit Union. Members may choose to obtain these loans from a Credit Union instead of a traditional bank because of better terms and the interest rate advantages discussed above. Credit Unions may also offer indirect loans through businesses in their community. For example, a local car dealership may have a partnership with a Credit Union to extend auto financing to its clients.
Servicing these loans means that Credit Unions need to present bills and collect payments from their members. Credit Unions may have an advantage in offering members the intimacy of a limited number of branch locations where employees know their members’ names and can assist with account inquiries and payments. On the flip side, their for-profit brethren often have digital bells and whistles that more and more consumers are looking for. Mobile banking apps make financial transactions easier than ever, and members are looking for similar solutions from their Credit Unions that streamline billing and payments.
So, what should Credit Unions be looking for in their electronic bill presentment and payment (EBPP) solution? Here are seven questions (and answers) for Credit Unions to consider.
1. How can I let my members know that a bill is ready for payment?
Make sure your EBPP solution has options for letting your members know that a bill is ready to pay. Bill-ready alerts and notifications may include paper bills, email, and SMS-based text messages. Give your members the option to combine these notifications in a manner that makes them most likely to pay their bills on time.
2. Can I offer my members different billing options for recurring charges like monthly loan payments?
Your members might be looking for more than a one-time bill payment option. Offering AutoPay can help them manage their finances and ensure that they never miss a payment. It can also help your Credit Union maintain a steady, predictable stream of payments.
In addition, recurring payments give members the flexibility to align payments with their personal financial situations. For example, they can make payments bi-monthly to coincide with paydays or set payment limits for additional financial protection. Recurring payments don’t need to be “one size fits all” – they can be customized to meet each member’s unique needs.
3. What options can I provide my members for payment methods? Can our Credit Union accept payments from other bank accounts?
An EBPP solution should easily support and accept an array of payment methods including debit cards, credit cards, and ACH payments made from both house accounts and external accounts.
4. Some of our members like to pay in-person, some like to call us, and others are looking to do everything from their mobile devices. How do we support payments acceptance across all these different channels?
Your EBPP solution should account for a wide variety of payment channels, from IVR and walk-ins to mobile payments. The technology can streamline acceptance across all these channels and record the data in a single solution for a top-down view into your entire payments program.
In addition, it should be able to consolidate all receivables across your credit union – not just a specific portfolio. For example, each retail lending division within a Credit Union could have a separate payment strategy within the same EBPP solution to drive efficiency and create transparency across the entire organization.
5. Servicing our members is our top priority. What should we be looking for in an EBPP solution so our member experience is top-notch?
By having all your payments recorded in one solution, you can improve operational efficiency for your member-facing teams. They should be able to easily pull billing and payments reports from your EBPP solution to answer questions and resolve issues on behalf of your members.
6. We have so many considerations to think about when it comes to the security of our financial data and the regulations that our Credit Union is subject to. Do we need to worry about compliance for our payments, too?
PCI DSS compliance is a must when you’re accepting electronic payments. Your EBPP solution provider should be able to handle PCI DSS compliance on your behalf by ensuring that you’re never exposed to sensitive payment data. This will keep your Credit Union out of scope for PCI DSS compliance, meaning your EBPP solution provider worries about it – not you.
7. What aren’t we thinking about when it comes to billing and payments?
Payments are only continuing to evolve. Credit Unions should be focused on serving the needs of their members, not trying to keep up with the latest payment trends. Choose an EBPP provider that will do this on your behalf and adapt their technology seamlessly, so you can offer the best, most contemporary experience to your members.
The Bottom Line: Credit Union members are looking for modern billing and payment solutions that larger, for-profit banks offer. Partnering with the right EBPP solution provider can accelerate cash flow while providing members with better choices and more streamlined experiences.