Author: Communications

Today, PSCU – the nation’s premier payments CUSO and an integrated financial technology solutions provider – published the May edition of the PSCU Payments Index, the goal of which is to provide information and insights to help financial institutions navigate the evolving financial landscape to make informed, strategic decisions for their organizations and members.

This month’s report finds continued softening of consumer purchasing activity amidst contracting inflation. While overall payment growth is still positive, April 2023 data revealed extended weakening of consumer spend and lower average purchases for both credit and debit cards. This month’s Deep Dive highlights strength in contactless card payments, led partially by generational differences, as well usage concentrations in certain sectors.

In the Labor Department’s May 10 update, the Consumer Price Index (CPI) increased by 0.4% in April. The annual rate of inflation dropped from 5.0% through March to 4.9% through April. While this is the tenth consecutive monthly drop in the annual rate from the peak of 9.1% in June 2022, it is still much higher than the Fed’s target annual inflation rate of 2.0%. The largest contributor to inflation was again shelter, followed by used cars and trucks, which offset the decline in the gasoline index. The Federal Reserve increased rates by 25 basis points on May 3 and signaled a potential pause in rate hikes, with their next meeting scheduled for June 13-14. The current Fed Funds Rate is 5.25%, compared to 0.5% a year ago.

The Consumer Confidence Index fell in April to 101.3 (1985=100), down from 104.0 in March, while the job market remains strong. The Bureau of Labor Statistics (BLS) reported in its April 2023 jobs report that 253,000 jobs were added for the month, with the continued trend of increased jobs in professional and business services, health care, leisure and hospitality and social assistance. This is stronger than the 180,000 new jobs that were expected by economists in a recent WSJ poll. The overall unemployment rate for April finished at 3.4% or 5.7 million people, which is now the lowest since 1969.

Taking center stage in Washington, D.C. in the coming weeks will be the battle to increase the debt ceiling, with the Treasury Secretary indicating that the U.S. Government will default on or about June 1. The White House estimates that a protracted default would have a devastating impact on the economy, with potential job losses at over eight million, raising unemployment by five percentage points and dropping GDP by over six percentage points. One of the immediate impacts would likely be a delay of social security benefits and military staff payments.

“While contactless adoption is still behind other regions, we expect that contactless card volume in the U.S. will continue to grow quickly,” said David Albertazzi, Director, Retail Banking & Payments at Aite-Novarica Group. “The acceptance infrastructure is already available, with Apple Pay now accepted at more than 90 percent of U.S. retailers. The recent introduction of SoftPOS, aka Tap to Pay, enables merchants to accept contactless payments on a regular smartphone. SoftPOS will further drive the migration from cash to card, as well as the shift to contactless as the preferred payment method at the point of sale.”

A sampling of key takeaways from the May report includes:

• Transactions in April grew at a higher rate than purchase dollars, for both credit and debit cards, for the second consecutive month. For April, both credit and debit transactions were up 4% year over year. Credit purchases were up 2% and debit purchases were up 3%. For credit purchases, the largest contributor to growth was the Services sector (1.0 percentage point of growth) while the Goods sector offset that with a 0.8 percentage point reduction. For debit purchases, three sectors generated the highest growth, with Restaurants, Money Services and Food & Groceries each contributing 0.8 percentage points of growth. Debit purchases were offset by a reduction of 0.6 percentage points in Gasoline.
• The Consumer Price Index (CPI-U) decreased on an annual basis from 5.0% to 4.9% in April. For the third consecutive month, shelter accounted for the majority of the all-items inflationary increase. The Fed increased rates by 25 basis points on May 3 and signaled a potential pause on subsequent near-term increases. The next update will occur on June 14.
• Growth in contactless “tap-and-go” transactions remained strong in April, with credit transactions up 9.6 percentage points and debit transactions up 11.7 percentage points compared to a year ago. Growth in “tap-and-go” was strongest in the food-related sectors of Restaurants and Grocery Stores, as well with the younger age demographics of Gen Z and Millennials.
• Growth in non-discretionary spending slowed on both credit and debit cards with credit up 1% and debit up 2% year over year. Discretionary spending grew at a greater rate than non-discretionary spending, with credit up 4% and debit up 8%. Transaction growth on credit cards was up 4% each for discretionary and non-discretionary transactions. Transaction growth on debit cards was up 12% for discretionary and up 3% for non-discretionary transactions.
• The credit card delinquency rate for April finished at 1.81%, above the March 2019 pre-pandemic level by 0.13%. Total credit card balances were up 13.9% for April compared to a year ago, while the average credit card balance for active accounts was $2,946, up 8.7% (or $235) year over year.

The full report is available for download here or can be shared as a PDF upon request. Let us know of any questions or additional needs, or if you’d like to coordinate an interview.

Co-op Solutions White Paper Points to ‘Compelling Golden Opportunity’ for Credit Unions

For Release on May 17, 2023:

RANCHO CUCAMONGA, California – In response to ongoing financial uncertainty, consumers are looking for reassurance in the form of convenient financial solutions that balance immediate needs with long-term financial success. New research from Co-op Solutions indicates credit unions have an opportunity to provide that reassurance through convenient tools that manage day-to-day needs.

The research, conducted in partnership with EY and Mastercard, studied recent changes in consumer and credit union member behaviors, preferences, challenges and activities. More than 2,000 current credit union members and 1,000 credit union prospects participated in the survey.

Co-op’s research is available at no charge for immediate download, via the white paper “Co-op CU Growth Outlook: Fueling financial performance through daily interactions.”

Among the research findings were four key takeaways pointing to what the report calls, “the compelling golden opportunity” for credit unions:

1. Credit union relationships are increasingly fragmented: Credit union members have on average triple the number of financial relationships as non-credit union members.

2. Convenience tops cost: Both members and prospects show a preference for financial products that offer additional convenience features along with rates that are on par with the market.

3. Digital payments are primary: Making payments digitally continues to expand and has emerged as the primary driver of daily interactions and member engagement. Forty-five percent of respondents cited engagement as the top reason for maintaining a primary relationship with their financial services provider.

4. Micro interactions lead to long-term loyalty: There is a direct correlation between daily money management and long-term spending and savings impacting members’ overall financial wellness.

“These insights highlight the compelling golden opportunity that credit unions have to effectively compete with national banks and fintechs, by offering financial tools focused on meeting their members’ daily micro transaction needs to grow member economic participation,” concludes the report.

In response to the research, Co-op Solutions recommends credit unions address three areas of focus:

1. Engage everyday: Credit unions can acquire and deepen member relationships across all segments and categories of behavior by becoming more deeply embedded into transactional value streams and winning the primary financial interaction moment-by-moment.

2. Give good guidance: By helping members manage their daily financial needs, credit unions are well positioned to support their long-term financial wellness goals.

3. Earn the member balance sheet: Credit unions can earn more of their member’s financial relationship by offering solutions that combine competitive rates and pricing with outstanding convenience – all designed around personalized member needs.

“To regain the trust of financial consumers and achieve long-term growth, credit unions must rethink their reliance on life-stage services like lending and embrace a new model of member centricity that begins with serving members’ everyday lifestyle financial needs,” said Samantha Paxson, Chief Experience Officer for Co-op. “Daily, micro transactions are the gateway to long-term relationship value, and are the best route to institutional growth and fulfilling our role of helping to enable members’ financial wellness.”

Credit unions are invited to immediately download at no charge the research report, “Co-op CU Growth Outlook: Fueling financial performance through daily interactions.”

About Co-op Solutions

Co-op Solutions is the market-leading financial technology platform whose mission is to connect credit unions to the technology, strategic partnership and scale they need to best serve their members now and into the future. Co-op partners with credit unions to unlock their potential so they can compete; does the hard work of innovation, creating a one-stop opportunity to help credit unions grow; and offers knowledge and expertise in a world where everything must be integrated. For more information, visit www.coop.org.

Contact:

Bill Prichard, APR

Director, Public Relations

Co-op Solutions

(909) 532-9416

Bill.Prichard@coop.org

May 2, 2023 – The credit union industry often emphasizes the importance of sharing stories with members about the cooperative ecosystem. AKUVO CEO, Jay Mossman, has a unique story to tell. After building a successful tech company and selling it, he’s returned to the industry with a CUSO that has created a credit union model focused on retaining members during difficult times. Mossman’s leadership stems from his deep understanding that financial health is essential to building a good life for individuals and families.

Mossman was inspired to take action recently after hearing Rafal Matusiak, president of the Polish Credit Union System and CEO of Via Stella Foundation, speak at an UNDERGROUND event. Matusiak described how leaders worked together to build a path to safety for millions of Ukrainian refugees in Poland, primarily women and children. Mossman personally donated approximately $40,000 over the last six months to purchase an ambulance and medical equipment for these refugees.  Mossman’s contribution provided an ambulance to evacuate ill and injured women from the Zaporizhzhia conflict zone where the embattled nuclear power plant is located.

Mossman asked Mitchell, Stankovic and the Underground to issue a challenge to his colleagues running CUSOs for 10 of them to make donations of $10,000 each to Via Stella Foundation, supporting the Polish credit union movement’ front lines work to respond to the war’s humanitarian crisis. “The CUSO business model is dependent upon access to members and when credit unions work together to solve issues, it is a market differentiator,” Mossman said, “There are no CUSOs without credit union members. Fintechs and other competitors want access to our members, but we have their trust when we embody the motto, “people helping people.” I challenge my CUSO colleagues to be humanitarians and support credit union response in Poland.”

“CUSOs and credit unions have been moved by Rafal Matusiak’s appeal,” noted Via Stella Board Advisor Susan Mitchell, who is also CEO of Mitchell, Stankovic and Associates and the Underground. “I am proud to share that since we first featured the Russian war on Ukraine and how Polish credit unions are responding in March of 2022, more than $200,000 has been raised from our Underground community. These donations go directly to Via Stella Foundation to fight back and give a path of safety for refugees.”

Underground thought leaders are responding. Tony Boutelle, CEO of Origence, just stepped in with a $25,000 donation. Brett Martinez, CEO of Redwood donated $50,000. Keith Sultemeier, CEO, and Kinecta’s Board donated over $100,000 since the invasion by Russia, and other Underground participants like Eagle Community, Santa Cruz Community, and Unitus have contributed.  Individual donations have also come from Underground attendees who purchased pictures from Ukrainian and American children, which were auctioned at the Underground Collision with Money 20/20.

Stand up with Jay and make a difference. “CUSO leaders, let’s raise $100,000!  Be a CUSO trailblazer and ally.” 100% of your donation will go directly to Via Stella Foundation. The fight is real in Ukraine and Poland and credit union people need help!

Dr. Branch, Chair of Via Stella Foundation says it best, “When others rush out from conflict, credit unions rush in. I urge you to respond to Jay Mossman’s challenge.”

Funding contributions can be made via wire instructions on the Via Stella Foundation:  https://www.viastella.pl/   and credit card contributions can be made via the PayPal portal on the same Via Stella website: https://www.viastella.pl/ .

Contact: Zach Christensen
Zach@mitchellstankovic.com

April 27, 2023 – PSCU, the nation’s premier payments credit union service organization (CUSO) and an integrated financial technology solutions provider, has announced the general availability of its new Installment Payments solution. This launch follows a successful pilot program with a select group of the CUSO’s credit union partners.

A buy now, pay later (BNPL) offering, PSCU’s Installment Payments solution enables cardholders to divide purchase amounts into smaller payments over a fixed period, giving members more flexibility to budget as needed and take greater control over their finances. The solution allows specific post-purchase credit card transactions to be converted into installment payments, providing a flexible payment method for cardholders while creating new revenue streams for credit unions. Additionally, PSCU’s solution lets credit unions customize the criteria for installment plans based on member data, which informs realistic repayment terms that minimize delinquency risks.

“PSCU is proud to expand the availability of this new tool, which offers benefits to all of our Owner credit unions and their members,” said Cody Banks, managing vice president, Payments, Fraud and Loyalty at PSCU. “When developing this technology, we prioritized enhancing members’ financial wellness and offering cardholders flexible digital payment options to help with budgeting and planning larger purchases, empowering users with the opportunity to decide how and when they pay. It is also a chance for credit unions to promote their credit card as the card of choice for members interested in a BNPL offering, ultimately driving increased interchange revenue, deposit balances and overall credit union brand visibility.”

Key capabilities of PSCU’s Installment Payments solution:

• Enables credit unions to select offers and eligibility for increased control and flexibility
• Utilizes cardholders’ existing credit lines
• Provides credit unions with the ability to set monthly payments with a fixed APR
• Empowers cardholders to take an active role in their individual financial wellbeing
• Provides convenient access through PSCU’s suite of market-leading digital solutions via APIs

“This technology positions PSCU and its credit unions to effectively compete in the BNPL space, which should be a consideration for all credit unions and partners when it comes to growing portfolios, attracting new accountholders and offering elevated solutions to members,” said Denise Stevens, chief product and digital officer at PSCU. “What sets PSCU’s new solution apart from other financial services providers is its ability to use existing lines of credit, enabling credit unions to deliver the right installment plans to the right members. This not only presents less risk, but it truly allows members to rely on their credit union as their trusted financial partner now and in the future.”

PSCU’s Installment Payments solution comes at a time of increasing consumer demand for innovative digital payment solutions, including installment payment options. According to the PSCU 2022 Eye on Payments study, 60% of respondents who know their financial institution offers a BNPL solution report they have used it. Among those who do not know if their financial institution offers BNPL or know it does not, 32% say they would likely use it.

For more information on PSCU’s Installment Payments solution, visit pscu.com/bnpl-installment-payments.

About PSCU

PSCU, the nation’s premier payments CUSO and an integrated financial technology solutions provider, supports the success of more than 2,400 financial institutions and processes nearly 7.7 billion transactions annually. Committed to service excellence and focused on continuous innovation, PSCU’s payment processing, fraud and risk management, data and analytics, digital banking, strategic consulting and real-time payments platforms, along with 24/7/365-member support via its contact centers, help deliver personalized, connected experiences. The origin of PSCU’s model is collaboration and scale, and the company has leveraged its influence on behalf of credit unions and their members for more than 45 years. Today, PSCU provides an end-to-end, competitive advantage that enables credit unions to securely grow and meet evolving consumer demands. For more information, visit pscu.com.

April 20, 2023 – Dustin Rohde, vice president of lending at $83.6 million SnoCope Credit Union in Everett, Wash., is the latest winner of a scholarship from Prodigy, the leading core processing and private cloud Credit Union Service Organization, to attend the 2023 CU Development Educators program in Madison, Wis.

“Getting this scholarship is a fantastic chance that will allow me to pursue the education and skills I desire,” Rohde said. “I love learning and everyone who has participated in this program has raved about it. Through this training, I intend to learn how to positively impact my members’ financial situation. Financial literacy has always been important, and our members look to us to be the experts. I am certain that this program will provide me with the skills that I need to better educate and serve my members.”

“We understand how important enhancing credit union leaders’ education is,” Prodigy CEO Amber Harsin said, and that shouldn’t be stunted because their credit union lacks the resources – in fact, that makes it more important! We’re very excited for Dustin, because we know he’ll take full advantage of this opportunity and bring it back with him to SnoCope.”

Prodigy’s third and final scholarship planned for the year to attend Western CUNA Management School will be open for applications later in 2023. The company sent Tina Wickes, vice president of lending of the $68.5 million Columbine Federal Credit Union, to CUNA’s Governmental Affairs Conference, Feb. 26 – March 2, in Washington, D.C.

“We all need education to mature and develop,” Rohde reflected, “but not everyone has access to it. The educational opportunities Prodigy provides are a huge asset to both their partner credit unions and the credit union movement as a whole. This genuinely supports the CU philosophy of ‘people helping people!’”

Harsin explained, “We operate according to the eight cooperative principles, the fifth of which is education, training and information. We expanded our scholarship program this year to ensure credit union executives have the opportunities they need to succeed – regardless of the size of their credit union or its budget – and benefit the entire credit union movement.”

More than 2,500 people from dozens of countries have graduated from the U.S. CUDE program since its launch in 1982. The DE experience includes learning on The Credit Union Difference: Understand how to communicate and leverage credit unions’ unique business model and cooperative principles; Empathy & emotional intelligence in banking: Create a competitive advantage in a disrupted market; and Development issues: Identify and solve challenges preventing the financial health of your employees, members and communities.

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Prodigy is a core processing and private cloud Credit Union Service Organization (CUSO), featuring a modern browser-based core and an API architecture for simple integrations, so credit unions can choose what business partners they want to use. Prodigy is 100% owned by 24 credit unions from California to New York with asset sizes ranging from $7 million to more than $500 million. We empower credit unions to participate in the direction, evolution and design of innovative products and solutions. Visit www.CUProdigy.com to learn more.