In a move to reduce the strain on its small staff and improve service, a credit union in Wyoming now lets its members pay their mortgages and other loans simply by sending a text message.
Laramie Plains Community Federal Credit Union has 5,500 members spread across a rural area of some 300 miles in southeastern Wyoming.
"We have a high concentration in indirect lending, and we were allowing members to call in and make loan payments over the phone," said Tyler Valentine, the Laramie, Wyo.-based credit union's president and CEO.
With only one branch, processing loan payments was becoming an issue for the 12 employees, four of which manually key in loan payments.
"Our peak branch days are also are peak loan payment days, so we were getting backlogged, which created a bottle neck," said Valentine. "Tellers can't answer the phones and deal with members in the lobby or the drive-through at the same time."
On an average month, approximately 500 loan transactions were being keyed in by tellers. The average time to enter a loan was two minutes. "We couldn't keep up," said Valentine.
To make better use of the teller's time and to make payment easier on members, Valentine began vetting bill pay technology providers. One of the credit union's existing service providers, Sharetec Systems Inc., introduced ProPay, a TSYS company, and its LenderPay product.
The ProPay cloud-based software doesn't require a mobile app to download or an online payment portal, noted Mike Cottrell, ProPay's director of sales and marketing. "We have integrated with several core systems, Sharetec being one of them. The credit union determines how it wants to reach out to its members and what functionalities will be used to streamline operations."
With more than 100 credit union clients, ProPay is scalable — from smaller credit unions with assets below $50 million to the $4.4 billion Mountain America Credit Union. The latter has provided the technology to its 500,000 members for the last three years.
"LenderPay seamlessly integrates with our core system and gives tech-savvy members the payment options they expect," noted another client, El Paso Area Teachers Federal Credit Union's Manager Laura Schaffino. The $587 million credit union supports 57,000 members.
Operation, Security and Compliance
The real-time payments technology allows lenders to accept bank credit or debit card payments for existing accounts with no transaction fees and no cash advance fees, explained Cottrell. To this end, members can make mortgage payments, car payments and fund accounts with Visa, MasterCard, Discover and American Express cards.
The first time a card holder signs up for the service to make a payment, he or she is taken through a secure landing page that is part of the application process. They are then directed to a secure URL where they enter card data.
"Once the information is there, they never enter the card data again," said Cottrell. He added that 80% of users never return to the URL opting to use text or related smart device payment options.
A member, for example, will receive a text message that his or her mortgage is due. By simply responding to the text with a dollar amount, the funds are instantly directed to the CU's core system, which funnels the secured payment to the loan balance.
Scott Sucher, ProPay's vice president of new business development, added the technology is Payment Card Industry Data Security compliant and certified. "Most credit unions are strapped for technology resources, so we developed a turnkey solution that is based upon business rules and regulations."
To integrate and roll out the offering to members, which includes a signed contract, securing payment link options and in some cases customized, co-branded interfaces, Sucher said to expect 10 to 20 days. This window of time matched Laramie Plains Community FCU's experience. Valentine signed the contract in late August 2015 and was operational by mid-September.
"We always have had monthly goals, but now we can direct staff to focus on cross-sales that have always been important to us, but we got bogged down," said Valentine. "This has resulted in an 80% increase in our goal attainment. We attribute this to tellers taking their focus of off processing loan payments."