CO-OP CARD REFRESH
Best of Credit
and Debit
Information
Table of Contents
1. Introduction........................................................ 3
5. New Tools in a Changing Environment................... 29
Overview......................................................................4
Happy Birthday, Target Breach! Now Go Away.................. 31
Innovations in Credit and Debit Cards: Keep Them at the
Will Tokenization Eat EMV’s Lunch?................................. 33
Leading Edge................................................................5
2. Mobile Advances Plastic........................................ 7
3. Generating Revenue with Credit............................ 11
Credit is Back.............................................................. 12
Does EMV Use Tokenization? Your Questions Answered..... 34
8 Questions You Asked About CardNav............................ 37
Q&A: Charged Up Over Mobile Security........................... 39
Hot off the Presses, CardNav Debuts at Bethpage FCU...... 41
Was Revenue in the Cards?........................................... 13
6. Building Relationships from the Inside Out............. 43
Three Seasons of Increased Spending............................. 15
Is Your Credit Card Program Integrated Enough For You?.. 45
Member Rewards and the Modern Consumer................... 19
CO-OP Products to Up Your Card Game........................... 47
4. What’s New with Cards?...................................... 22
Evolving at the Speed of Apple?..................................... 24
Credit: New and Ready to Grow?.................................... 25
Could Your Rewards Program Be More Rewarding?............ 27
More Fast + Brilliant Products from CO-OP...................... 48
BEST OF CO-OP CONTENT ON CARD PAYMENTS
1. Introduction
Overview
Welcome to the first CO-OP Card Refresh, a digest of
what’s new with credit, debit, and the products and
processes that go with them. Here you’ll find the best of
our credit and debit related content from recent months,
along with CO-OP’s own data on usage and growth.
Inside is a wealth of information:
• Data and Analytics
• Good to Grow: Generating revenue with credit
• Innovations: What’s new with cards?
• Tightening up Security: New tools in a changing
environment
• Cards in Context: Building relationships from the
inside out
Credit and debit form the basis for a meaningful, ongoing,
growing relationship with your members. In the pages
that follow, look for inspiring indicators of growth,
innovations and trends that are changing the future of
payments, a roundup on new security technology, and
perspectives on integration as 2015 unfolds.
Best of Credit and Debit Information | Spring 2015 | Introduction
4
Innovations in Credit and Debit Cards:
Keep Them at the Leading Edge
By Ryan Zilker, Business Manager, Product Development
They have been around so long, it’s easy to begin thinking
of them as inert pieces of plastic. Yet, credit and debit
cards remain among the most dynamic products credit
unions can offer, and they in fact represent an opportunity
to serve members at the leading edge.
Consider the growth in credit card spending during 2014.
According to the company’s analysis of credit transactions
processed by CO-OP Financial Services, credit spend
steadily increased throughout the year. In January 2014,
the average spend per card was $363.08, and in January
2015 the average spend was up to $381.18, an increase
of five percent per card during comparable periods.
This combines with the continued strong transaction
volumes for cards. CO-OP’s own analysis of debit and
credit transactions it processed found the combined total
holding strong, even growing, from about 120 million
transactions per month in December 2013/January 2014
to more than 140 million transactions in November 2014.
Credit and debit card use is as vibrant as ever, and new
technology is adding to its luster, in the form of payment
innovations, security innovations and data/analytics.
Payment innovations and security innovations, in fact,
seem to be going hand-in-hand.
The introduction of Apple Pay last September brought
the tokenization data security process to the forefront.
In addition, the Oct. 1, 2015, “liability shift” for EMV is
finally bringing this global standard to the U.S., where it
will ultimately be the standard as well.
CO-OP believes tokenization and EMV together will
provide even better security for the U.S. payment system.
Think of EMV as the security for a plastic card in a card
present transaction, and tokenization as the security for
digital transactions, whether mobile, online or in-store.
Best of Credit and Debit Information | Spring 2015 | Introduction
5
So while the technologies are similar, they are designed
for different use cases. Coupled together they will make
it much more difficult for fraudsters and improve the
security of all transactions. And global interoperability
of EMV chip cards is still a key driver of adoption in the
United States.
Apple Pay and other mobile products answer member
needs for payments methods that are fast, brilliant
and connected. But consumers in equal measure are
demanding greater personalization. One answer is card
controls and alerts, such as CardNavSM by CO-OP, which
enables the user to individually turn their cards on and off
and set spending limits by category.
There’s no question that the credit and debit cards you
issue are key drivers towards primary financial institutionrelationships, and represent a large and consistent source
of revenue.
Your members use cards to interact with you more than
any other form of transaction, and the way you position
your cards determines in large measure how you position
your credit union.
With the advances available to you today in cards, you
can be seen as a technology leader, a secure and fun
source of payment, an efficient and rewarding financial
services provider, and – in a crisp phrase – first in class.
These innovations can be utilized to the maximum
through the data analytics tools now at the ready. Credit
unions certainly do not have unlimited resources to
encourage low spenders and members who are slow to
activate their cards.
Analytics tools provide credit unions with deep insight
into their full portfolio’s performance – right down to the
transactions of an individual card, network, merchant and
ATM. Armed with this data, you can better understand
and influence cardholder behavior, and focus on members
with the greatest potential through rewards programs and
other targeted efforts.
Best of Credit and Debit Information | Spring 2015 | Introduction
6
CO-OP DATA & ANALYSIS
2. Mobile
Advances
Plastic
Mobile Advances Plastic
A report published in July of 2014 by the Federal Reserve
Bank – “Consumer Preferences and the Use of Cash”–found
that more than 65 percent of consumers reported plastic
(debit or credit) as their preferred payment method, while
only 29.6 percent preferred cash. It’s a good guess that
we’ll continue to see the preference towards plastics grow
as transactions shift online. Looking at volumes across COOP’s processed transactions, we see steady growth in both
debit and credit for 2014 (see Figure A).
Here (Figure A), the green trend line shows the upward
trajectory of card transaction volumes. When we look deeper
into the monthly spend trend of credit cards, specifically dollar
volumes, the trajectory is even more dramatic (see Figure B).
Figure A
CREDIT AND DEBIT TRANSACTION
VOLUME TREND (2014)
180
140
120
100
80
60
40
20
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
All CO-OP processed debit and credit transactions
CREDIT SPEND DOLLAR TREND (2014)
Dollars (in millions)
I recently saw this headline in PaymentsSource: “Mobile
Makes Headlines, But Plastic Makes Progress.” While
that certainly aligns with my point of view on the matter,
I’d take it a step further and say that “Mobile Moves
Plastic Forward.” That might be a provocative thing to
say, seeing as how Apple is taking a piece of proverbial
interchange pie, and we can expect Samsung and Google
to do the same. That’s not to mention that TSPs (Token
Service Providers) are also getting their share. As mobile
payments continue to grow, pundits are making their bets
on when mobile might eclipse plastic.
Transactions (in millions)
By Ryan Zilker, Business Manager, Product Development
Figure B
100
90
80
70
60
50
40
30
20
10
Jan Feb Mar Apr May Jun
Jul Aug
All CO-OP processed debit and credit transactions
Sep
Oct
Nov
Dec
In all fairness, part of this dramatic growth is due to the
fact that CO-OP continues to add new credit unions and
more cardholders, almost monthly. But even after we
normalize the data and look at average spend per card, we
see an upward trend. In January 2014, the average spend
per card was $363.08, and in January 2015 the average
spend was up to $381.18. Credit spend per card increased
5 percent during comparable periods year-to-year.
Best of Credit and Debit Information | Spring 2015 | Mobile Advances Plastic
8
Couple these transaction trends with some behavioral
changes reported by NCR, and you start to see a pattern
(see Figure C).
In this example, we see that the mobile channel is
growing fast, but has yet to overtake the other three
channels. Carry these growth rates forward just three
years, however, and we see an entirely different mix.
Mobile transactions will eclipse the other three channels
with 116 billion transactions predicted by 2018. When
trends are extended out like this, it is easy to see the
importance of mobile.
Because of the projected growth in mobile, we know
that spending is going to shift to shopping online, in
app, and in store. The key now is to get our credit union
cards embedded into as many payment vehicles as we
can. Office retail giant Staples reports that more than
25 percent of its in-app purchases are made using Apple
Pay – meaning that they’re tied to a card. If you have
an Uber account, it either has a card loaded into it, or it
uses Apple Pay. Soon we will be adding in Samsung Pay,
Google Pay, and Microsoft Pay (or is it Windows Pay?) –
all of which will be card based. Even MCX is rumored to
be softening its stance on allowing cards into its CurrentC
wallet. Any way you slice it, cards are going to be the
foundation of first generation mobile wallets, so now is
the time to get engaged.
Figure C
Mobile
Online
ATM
Branch
Annual Global
Transactions
29bn
35bn
94bn
76bn
Average
Interactions/
Person/Year
25x
44x
30x
19x
Annual
Growth Rate
59%
18%
1%
7%
VOLUME OF TRANSACTIONS
PROCESSED ON DEBIT CARDS
35%
Pin, 131, 512, 260
10%
ATM, 36, 803, 265
7%
PAVD, 26, 460, 649
48%
Figure D
Signature, 179, 185, 338
When you look at the number of transactions processed
on debit cards in Figure D, the volume is overwhelmingly
skewed towards signature transactions.
Best of Credit and Debit Information | Spring 2015 | Mobile Advances Plastic
9
However, when you look at dollars spent in Figure E, the
break out is a little more evenly split.
This is because the payment method people choose is
driven by ticket amount.
Figure F, provided by Visa, helps shed some light on
which payment medium consumers prefer.
31%
Pin, $5,432849,078.17
27%
ATM, $4,758,640,699.02
6%
PAVD, $1,079,967,241.30
36%
Regardless of ticket size and payment choice, we know
that credit union card payments are growing, nationwide.
According to CO-OP’s year-end data for 2014, here is a
region-by-region map of signature transaction growth in
Figure G.
Signature, $6,358,799,724.56
Figure F
WHAT IS YOUR PREFERRED PAYMENT
METHOD CHOICE BY TICKET SIZE?
80
PERCENT
Mobile payments will continue to advance in 2015.
Instead of viewing mobile as competition for traditional
cards, consider that the popularity of mobile is only
upping the ante for credit and debit. Growth can raise the
stakes for all, if you play your cards right.
Figure E
DOLLARS SPENT ON DEBIT CARDS
CASH
SWITCH FROM CASH
TO DEBIT AT $11-25
60
SWITCH FROM CASH
TO CREDIT AT $26-50
“I’m used to cash for small
amounts” - 61%
40
“I’m uncomfortable using cards
for small amounts” - 30%
20
DEBIT
CREDIT
CHECK
<$2
$2-4
$5-10
$11-25 $26-50
$51-100
$101-500
$500+
SIGNATURE TRANSACTION DOLLARS
GROWTH RATE IN Q4 2014
Figure G
MIDWEST
12.39%
NORTHEAST
15.36%
WEST
7.86%
SOUTHWEST
2.73%
MID ATLANTIC
16.15%
SOUTHEAST
2.17%
Best of Credit and Debit Information | Spring 2015 | Mobile Advances Plastic
10
GOOD TO GROW
3. Generating
Revenue with
Credit
Credit is Back
Year-end data from Callahan & Associates Peer-to-Peer
Analytics confirms that 2014 was a banner year for
credit. Credit union credit card balances rose 8.1 percent
to $46.5 billion, while credit unions added a healthy 1.2
million credit cards for a robust 7.7 percent increase for
the year.
Equifax data simply underscores the point: Outstanding
credit card debt jumped to $642.4 billion in December,
up from $606.75 billion a year before – meaning that the
average American’s credit card balance increased by 5.9
percent in 2014.
Growth is a happy development, but how do you prepare
to meet the challenge of increased demand – and the
increased competition that goes with it? Find out more
as we take a few quick looks at the opportunity that
2014 brought; how and where spending increased; and
how enhancing features like member rewards can pay
dividends in increased loyalty.
CREDIT UNION CARD
BALANCES UP IN 2014
credit union credit card
balances totaled $46.5 billion
At the end of 2014,
fastest annual growth since 2008 which
8.1%
We saw the
was
(Source: 2014 Callahan & Associates Peer-to-Peer Analytics)
MORE CREDIT UNION CARDS
Credit union credit cards saw a new
1.2 million cards
They saw an annual
peak which was
growth of 7.7%
(Source: 2014 Callahan & Associates Peer-to-Peer Analytics)
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
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Was Revenue in the Cards?
By Bill Prichard, Senior Manager, Public Relations and Corporate Communications
Jennifer Kerry
Have credit cards been a moneymaker for credit unions during the past year? Insight Vault
caught up with Jennifer Kerry, Vice President, Credit Issuer Processing, for CO-OP, to get the
scoop on revenue growth – and ask how credit unions can capitalize on the credit trend.
Q:Looking back at 2014,
what kind of year was it for
credit union credit cards?
A:Unequivocally, it was great. We posted last month about the growth of credit
union credit cards across the board, but we’re also happy to report that COOP In-House and Full Service Credit clients are enjoying substantial growth.
Over the past 24 months, the CO-OP credit client base has grown nearly 20
percent on average. We’ve also seen multiple standouts reaching 30 percent
to 43 percent growth. We’re really delighted.
Q:Obviously, that’s great
news on the revenue front.
A:It is. Sometimes it’s so obvious that we overlook it: Credit card transactions
drive both interest and non-interest revenue at credit unions. Revenue is
not the only benefit to growing your credit card usage, but it’s certainly an
important one.
Q:Growth in the 20 to 43
percent range is clearly
a positive trend. What
can credit unions do
to capitalize on the
momentum?
A:The first thing we suggest is to think about raising credit limits. A lot of
consumers try to keep their card balances under 30 percent of their total
lines of credit, so even if your cardholders don’t appear to be “maxed out,”
you might both benefit from a higher credit line. This strategy is worth
considering for creditworthy members, but also for members who may be
“credit bruised” after the recent recession. If you can offer them products
such as cards that are secured by savings, you may be able to help them
bounce back. That’s not just good for your credit portfolio; it’s also a
relationship builder.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
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Q: Should credit unions be
looking at other ways to
maximize credit usage?
A:Yes, and they should also be looking at ways to maximize their
relationships with credit cards as a vehicle. For instance, target your debit
card users with credit card offers. If they already choose you for debit,
they may be inclined to open a credit account. You can also look at the
reverse: Encourage your credit card holders to open checking accounts.
Q: Without getting too
touchy-feely, is there an
emotional benefit at stake
here as well?
Credit cards continue to be very sticky. So while we don’t want to forget
about that interest and non-interest revenue we talked about a minute
ago, we also want to remember that credit cards can increase revenue
opportunities by engaging our members across the board.
A:We think so. Consumers may be charging up their credit accounts again,
but most haven’t forgotten the hits they took during the Great Recession.
Being part of their comeback stories is a great role for credit unions. It
speaks to the kind of service credit unions have built their reputations on.
Having great credit card programs can also say a lot about the relevance of your credit union. Whether it’s having a
rewards program that engages members or offering member education around creditworthiness and financial literacy
– or even just letting members know that you see their need for credit and are answering it with products designed to
serve them – this is a great moment to send that message.
This story originally ran on CO-OPInsightVault.com
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
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Three Seasons of Increased Spending
By Bill Prichard, Senior Manager, Public Relations and Corporate Communications
Together with our partners Saylent Technologies and The
Members Group, CO-OP has been tracking and reporting
on member spending over the past several months. Our
big takeaway: Spending is up! Whether members were in
the mood to splurge on Valentine’s Day or helping to meet
funding goals in the ALS Ice Bucket Challenge, they’re
using their cards – as the following Insight Vault posts
clearly show.
Did the Ice Bucket Challenge Make
a Splash?
It was all the rage in August – but what was the result?
members of CO-OP’s credit union clients. The analysis
was done on a sample of 70 out of 900 credit unions.
Analysis comparing August 1-18, 2013 to August 1-18,
2014 found:
Debit card-based ALS contributions have increased
dramatically since the Ice Bucket Challenge started.
For example, these members increased their ALS
merchant-related transaction volume by 426 percent and
ALS merchant-related transaction spend by 384 percent.
•Donors are younger than they have been in the
past as a result of the Challenge. The average age
of these ALS donors in August 2014 is 38, versus an
average age of 45 during the same period last year.
Almost everyone saw the videos of friends, family,
celebrities and many others dumping ice water over their
heads as part of the ALS Ice Bucket Challenge. While it
has been a highly successful social media initiative, it’s
been shown that increased awareness of ALS was not
the only accomplishment. Donations to the charity have
escalated significantly.
“The credit union movement has always been
characterized by a people helping people ethic, dedicated
to making local communities better,” noted Stan Hollen,
President/CEO of CO-OP. “The donations to the ALS
Association in the past month shows that tradition springs
from the members themselves.”
CO-OP used CO-OP Revelation® to analyze the ALS
donation-related debit card transactions conducted by
The results cover donations-related debit card activity by
members of credit unions that use CO-OP for transaction
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
15
processing. The comparisons were performed through
CO-OP Revelation and conducted by Saylent’s FInsight360
consulting team.
solution, CO-OP Revelation, and was conducted by
Saylent’s Insight360 consulting team.
Among the highlights of the CO-OP Revelation data:
What Did We Learn about Back-to-School
Spending?
Back-to-school spending for the 2014-15 school year was
robust in August, with a 9.2 percent increase recorded
across 25 merchant types compared to August 2013.
Merchants offering computer software, stores selling
elementary/secondary school supplies and bookstores
were particularly busy leading up to Labor Day, according
to an analysis of debit card transactions by CO-OP
Financial Services.
An increase in the number of transactions – up 7.9 percent –
holds the key to the 9.2 percent spending increase. The
amount-per-transaction rose only 1 percent – $50.72 in
2014 from $50.12 in 2013. So, credit union members were
individually spending about the same amount, but more
members were making back-to-school purchases this year.
This analysis of sales is based on transactions made
during August, with results covering debit card activity
nationwide by members of credit unions that use
CO-OP for transaction processing. The year-over-year
comparison was performed through an advanced analytics
• Total spending at the selected back-to-school
merchant categories for August 2014 was $715.2
million compared to $654.9 million in August 2013, a
9.2 percent increase. The total number of transactions
recorded in 2014 was 14.1 million versus 13.067
million in 2013, a 7.9 percent transaction increase.
• Computer software was the merchant category with
the biggest jump in 2014 compared to 2013, with
spending up 44.3 percent and transaction volume up
48.5 percent.
• Elementary/secondary school supplies stores
achieved a spending increase of 29.3 percent and a
transaction increase of 39.7 percent.
• Bookstores realized a 20.1 percent increase in
spending and a 24.1 percent increase in transactions.
• Telecom spending rose 16.5 percent and transactions
increased by 15.5 percent.
• Department and stationery stores are the only groups
where spending and transaction volume dropped in
2014 compared to the previous year.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
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Members Make Holiday Cash Boxes Ring
The final results are pending, but three companies in the
service of the industry found that credit union members
got the 2014 holiday shopping season off to a robust start.
The Members Group found that credit spending increased
12.97 percent, and CO-OP Financial Services found that
debit spending increased 6.71 percent from Thursday–
Monday of Thanksgiving Weekend compared to 2013. The
finding of a 6.71 percent increase in debit card spending
covered activity at 20 different merchant types nationwide
by members of credit unions that use CO-OP for
transaction processing. The year-over-year comparison
was performed through an advanced analytics solution,
CO-OP Revelation, and was conducted by Saylent’s
FInsights360 consulting team.
CO-OP also found:
• Comparing 2013 to 2014, credit union members
increased their debit card usage and spend most at
cosmetic stores, with a close to 108 percent increase in
transactions and a 98 percent increase in spend.
• The day with the largest increase in debit card spending
compared to last year wasn’t Black Friday or Cyber
Monday as one may expect but rather Thanksgiving
Day, with an increase of 14 percent. This uptick may be
reflective of the broader retail trend of opening in the
afternoon and evening on Thanksgiving.
• At the same time, TMG found a 12.97 percent
increase in credit spending for users who carry
credit cards issued by TMG’s financial institution
(FI) clients. TMG’s analysts attribute this to healthy
growth in the credit card portfolios of TMG’s clients
and the fact cardholders used their credit cards on
average 1.35 percent more this year as compared
to last year. The analysis is courtesy of the card
processor’s proprietary analysis tool, ClearTrend. The
tool can provide similar data on a per-FI basis for the
processing clients of TMG.
Additional data from TMG includes:
• Electronic spending (shopping from online and mobile
devices with a credit card) increased 24.7 percent
year-over-year.
• Of the three days analyzed (Thanksgiving, Black
Friday and Cyber Monday), Black Friday was the
biggest day for credit card spending, accounting
for 42.03 percent of all credit card transactions.
On average, the transacting cardholder also spent
more on Black Friday ($147.63) compared to Cyber
Monday ($131.45) and Thanksgiving ($111.54).
Did an Improving Economy Lead to a
More Romantic America?
Americans are perhaps feeling more romantic in addition to
feeling more confident about the steadily improving economy.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
17
Research by three organizations serving the communitybased financial institution (FI) industry reveals Valentine’s
Day-related purchasing was way up in 2015. The
Members Group (TMG) found credit spending increased
21 percent, and CO-OP Financial Services found debit
spending increased 16 percent for the three days
culminating in Valentine’s Day compared to 2014.
The 21 percent increase in credit spending is based
on transactions made from Thursday, Feb. 12 through
Saturday, Feb. 14 by users carrying credit cards issued by
TMG’s FI clients. TMG’s analysts attribute this to healthy
growth in credit card portfolios of TMG’s clients and the
fact cardholders used their credit cards on average 3.5
percent more this year as compared to last year. The
analysis is via the card processor’s proprietary analysis
tool, ClearTrend. The tool can provide similar data on a
per-FI basis for the processing clients of TMG.
TMG also found that while Millennials (age 18-29) made
58 percent more transactions than the next closest age
bracket, they spent far less. Millennials spent an average
of $39.09 – 65 percent less than the next lowest age
bracket (age 30-39). In addition, out of the three days,
the day before Valentine’s Day (Friday, Feb. 13) saw the
most credit transactions – 9.3 percent more than Feb. 12
and 5.7 percent more than Feb. 14.
During the same Thursday through Saturday period,
CO-OP found a 16.45 percent increase in debit card
spending. The results covered debit activity at all
merchant types tracked nationwide by members of credit
unions using CO-OP for transaction processing. The
year-over-year comparison was performed using CO-OP
Revelation and advanced analytics and was conducted by
Saylent’s FInsights360 consulting team.
CO-OP additionally found that people used their debit
cards more this year when buying loved ones products to
help them check off their “honey-do” lists and better their
homes. This is reflected in an almost 38 percent increase
in transactions and close to 49 percent increase in spend
at home supply warehouse stores.
The two companies also found that consumers used their
debit cards more to go out for romantic dinners and drinks,
with a more than 33 percent increase in transactions and
47 percent jump in spend at restaurants, and a 79 percent
increase in transactions and more than 79 percent increase in
spend at bars compared to last year during this time period.
You can read the full report of findings on Valentine’s Day
shopping 2015 here.
These posts originally appeared on CO-OPInsightVault.com.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
18
Member Rewards and the Modern Consumer
Andrew Gates
CO-OP Financial Services
In today’s ultra-competitive credit/debit landscape, the benefits offered can make a substantial
difference in a consumer’s mind. Like many other aspects involved in the buying experience,
rewards programs are quickly evolving to meet escalating consumer expectations.
We had the opportunity to talk with Andrew Gates, Loyalty Consultant with CO-OP, about how CO-OP Member Rewards
is staying a step ahead of the competition to offer members a uniquely gratifying experience. Here are his valuable
insights from our discussion.
Q: How does Member Rewards
differ from a typical credit/
debit loyalty program?
A:We are making it easier than ever for members to earn points, without
adding cost for the credit union. Where CO-OP makes a big effort is
primarily in the merchant-funded space. It is safe to say that we have the
most robust merchant-funded rewards program in the industry. In terms
of national online products, CO-OP is leading the way with the soon to be
released browser plugin, which allows a member to get their rewards from
the merchant they are buying from without going through a third party
or a rewards website. It makes things more convenient for the member
because the logo of the program shows up everywhere they can earn
bonus points, including search results in Google, Bing and Yahoo searches.
Q: Are there any other points
of differentiation?
A:Tackling the local merchant arena is much harder in general because there
are so many “mom and pops” out there–but that’s where our members
shop and want to earn rewards. We will soon have close to 30,000
merchants involved in our local merchant program–and we’ll continue to
grow and expand over the coming months. We also make it easy for our
clients to add their own local merchants through an online boarding tool–
which increases the value to the member.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
19
Q: What effect does
merchant funded have on
the increasing value of
rewards?
A:At the end of the day, what we are trying to do is deliver value to the
member where and when they want it. By partnering with merchants,
there is funding for more customized incentives. We give them greater
access to our members in exchange for the ability to offer a better deal.
We expect the deals to get more and more exclusive as our data set gets
better and richer. So instead of a member going to Groupon for a local
deal, they will turn to their credit union.
Q: How is Member Rewards
uniquely suited to today’s
modern consumer?
A:Today’s modern consumer is looking for value through increased
personalization. They are okay with appropriate usage of data if it is being
used to deliver a personal experience. When you look at how people are
using the Internet–especially millennials–they are putting everything out
there. So from our standpoint, the two critical items are delivering value in
a timely, relevant fashion and in the way they want it.
Q: Are there any precedents to
learn from when delivering
such an innovative rewards
program?
A:The hot one right now is mobile. Ultimately, when you download your
credit union app, you have access with ease. What people don’t want is
to have to think when they go into a store. “Do I use my card? An app?
PayPal?” That’s why Visa and MasterCard have been successful for so long
and mobile wallets have had a hard time taking off. The former takes extra
thinking. So we want to provide something that is available almost without
thinking. But at the same time, the controls have to be in place so I can
turn it off or that I’m not inundated with offers every time I walk into a
store. This is a fine line to walk, and we are working to understand that.
This is also where personalization comes into play, because for example,
I will likely be more open to receiving alerts than another person. It’s not
one size fits all.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
20
Q: What about credit unions
that might be uncertain
about how to market
to millennials without
“turning off” their existing
membership base?
A:I don’t believe the non-millennials are that different anymore, in terms
of what they want to see from their credit union. The world is moving
forward together on this, millennials and everyone else. Each person is an
individual, so giving people the ability to manage how they are alerted and
set their own preferences is critical. I think the biggest difference between
millennials and the rest is that millennials use technology and expect
certain features and personalization. The rest of us are surprised and
delighted by it.
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The 2015 Credit Card Management School, a partnership between
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portfolio and program management, newly updated for 2015.
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This story originally appeared on CO-OPInsightVault.com.
Best of Credit and Debit Information | Spring 2015 | Generating Revenue with Credit
21
INNOVATIONS
4. What’s New
with Cards?
When you think of innovations in financial services, cards
may not be the first product that comes to mind. On the face
of things, cards are among the least altered tools we use to
manage our money every day.
But take a step back, and the picture changes dramatically.
Cards themselves are in fact evolving. Though we’ll explore
this topic in earnest in the next section, on security, the
emergence of EMV technology is literally changing the
way our cards look and function. The world of payments is
among the most explosive around: Rapid change and new
technologies are the norm as P2P payments gain traction,
mobile wallets come and go, and consumers open their minds
to new alternatives.
Never was this more in evidence than September 2014, when
Apple announced the introduction of Apple Pay. A million
users signed up in the first month alone. Just as significantly,
credit unions sprang into action. Instead of waiting to see
what the impact of Apple Pay would be, several credit unions
simply set up tokenization service and signed on. CO-OP was
there for the assist, helping clients navigate the uncharted
waters of tokenization and interfacing with Apple. And as
more and more of our clients decide to climb on board,
CO-OP is here to help smooth the way.
In the end, what’s new with cards is that there’s more to
the story than plastic alone. Keeping pace with innovation
means thinking broadly, acting boldly and moving swiftly.
Following is a sample of how new ideas crossed the
traditional world of cards.
Best of Credit and Debit Information | Spring 2015 | What's New with Cards?
23
Evolving at the Speed of Apple?
By Bill Prichard, Senior Manager, Public Relations & Corporate Communications
Credit unions may have accelerated their evolution rate
in recent years, but since Apple’s announcement last
month that a new payment system called Apple Pay is on
its way, the speed demands on credit unions have been
unprecedented. In order to help credit unions meet those
demands, CO-OP has been working to provide information
and pave the way for participation. As education and
opportunities continue to develop, CO-OP has launched an
online Tokenization Resource Center and has continued to
host webinars to keep credit unions up to speed.
“CO-OP is working with business partners and clients to
make sure credit unions have the technical and marketing
education they need to take advantage of the new Apple
wallet,” says CO-OP President/CEO Stan Hollen. “This
has included not only helping credit unions understand
the Apple Pay opportunity, but providing the assistance
needed to actually become enrolled as participants.”
CO-OP’s Tokenization Resource Center keeps credit unions
up to date with breaking news as well as Frequently
Asked Questions, an implementation guideline, the
recording and slides from prior webinars, tokenizationrelated blog posts and more. Have a question? The site
also includes an “Ask the Expert” feature that enables
visitors to submit questions for CO-OP’s team of experts.
Moving at the speed of Apple is a new experience for
credit unions. And though the experience has brought
with it more than a few white-knuckled moments, it’s
also revealed something about this industry’s capacity for
speed. Working together, we cannot only go far:
We can go fast.
This story originally appeared on CO-OPInsightVault.com.
CO-OP’s first webinar on tokenization and Apple Pay–
which ran in two sessions on September 24 – drew
a record audience of 1,100 participants. The followup webinar, “Innovations in Payments,” took place on
Tuesday, November 18, at 1 p.m. Eastern/10 a.m. Pacific.
Caroline Willard, Executive Vice President, Markets and
Strategy, and Michelle Thornton, Manager, Core Products,
for CO-OP reprised their roles as presenters.
Best of Credit and Debit Information | Spring 2015 | What's New with Cards?
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Credit: New and Ready to Grow?
Introduction
By Bill Prichard, Senior Manager, Public Relations & Corporate Communications
On the face of it, credit cards haven’t changed much since
their introduction decades ago. Plastic cards are so familiar
that they’re iconic. But the inner workings of the credit
cards issued by CO-OP’s credit processing clients have
changed dramatically in the past 12 months. New options
make the credit experience more secure, powerful, flexible
and rewarding. If you’re hoping to make credit a growth
area this year, offering a new experience may be the
differentiator you’re looking for.
Apple Pay and Tokenization: This was a late entry
and a surprise to boot. When Apple announced its new
tokenization-driven mobile payments app in September of
last year, credit unions wondered how they’d ever get on
board. It’s happening now. CO-OP is an engaged issuerprocessor for Apple Pay and Visa, which means CO-OP
can directly facilitate tokenization service and Apple Pay
enrollment for credit processing clients. CO-OP is also
helping credit clients get up and running with MasterCard’s
tokenization service for Apple Pay participation.
Sound like too much to ask of a little plastic card? Consider
the developments:
Learn More at CO-OP’s Tokenization Resource Center.
EMV: Cards embedded with EMV chips are now available
to clients who use CO-OP In-House Credit processing
and CO-OP Full-Service Credit processing through The
Members Group. EMV-enabled cards improve security on
card-present transactions, making them a popular option
for members and a money-saver for credit unions.
Learn More at CO-OP’s EMV Resource Center.
CardNav by CO-OP: What transforms an ordinary plastic
card into a dynamic money management tool? CardNav
by CO-OP enable cardholders to secure, track and manage
their card accounts from their mobile devices. It’s not the
individual actions that make CardNav transformative –
though the ability to turn cards on and off or set spending
limits by category are breakthrough – it’s the overall
experience that changes the game.
Learn More about CardNav.
Best of Credit and Debit Information | Spring 2015 | What's New with Cards?
25
Member Rewards by CO-OP Mobile App: Rewards are
not new this year, but the Member Rewards by CO-OP
Mobile App is. In the same way mobile card controls and
alerts change the cardholder experience from passive to
interactive, mobile rewards make incentives more usable,
trackable and desirable.
Learn More about CO-OP Mobile Rewards.
What’s most interesting about these four developments
is that they all materialized during the last year. One
year ago today it was impossible to foresee what January
2015 would bring. In fact, what it brings is a substantially
different card experience. The cards you issue today
may look largely the same as the ones you would have
mailed last January. But the security they offer – in
person, virtually, and interactively by mobile device – is
light years ahead. This year’s cards are mobile-ready,
whether members want to redeem their rewards on their
smartphones or do a little budgeting with their CardNav
apps. It’s a whole new card game for a brand new year.
This story originally appeared on CO-OPInsightVault.com.
APPLE PAY UPDATE:
BY THE NUMBERS
In a survey of 3,002 credit card holders released in March,
2015, Phoenix Marketing International found unprecedented
success – and a big sticking point – in the launch of Apple Pay.
Who has adopted Apple Pay?
•
•
11% of credit card-owning
households
mobile payments
How do they pay?
•
82% credit card (1.2 million cards)
•
53% debit card
•
20% prepaid card
Overwhelming conversion: 88% who set up an Apple Pay
wallet made a purchase.
Retail enthusiasm: 59% attempted to make an in-store
purchase.
Everyone can’t be Apple: 2 out of 3 users had problems at
checkout.
(Source: “Apple Pay Performance: The First Four Months,” Phoenix Marketing
International)
Best of Credit and Debit Information | Spring 2015 | What's New with Cards?
26
Could Your Rewards Program Be More Rewarding?
By Samantha Paxson, Chief Marketing Officer
As much as rewards programs have become table stakes
for credit cards, do you ever wonder if your rewards
program could be more rewarding?
MOBILE THAT MOTIVATES
According to a recent Cisco retail banking survey, 75 percent of
global respondents would move their money for one or more of
CO-OP recently released a mobile app to go along with its
Member Rewards by CO-OP program. Using the Member
Rewards by CO-OP mobile app, members can:
• View account status, statement history and point
balances
• Search for local deals and Shop Main Street merchants
these five items:
1. virtual financial advice
2. virtual mortgage advice
3. automated investment advice
4. mobile branch recognition
5. mobile payments
As people in all age categories become increasingly mobile-
• Redeem points and use eGift cards in real time from
their phones
dependent, empowering members with new ways to manage
• Review program terms and conditions.
Do your members manage their card accounts by mobile device?
their money via mobile device becomes an ever-larger motivator.
Could they?
Suddenly, rewards are usable anytime, anywhere.
Gone are your members’ frustrations with not knowing
how many points they have, not remembering which
merchants participate, not being able to convert points to
gift cards on the spot, and not having the gift cards handy
when they’re ready to pay. Instead, every aspect of your
rewards program is synced up and ready to use, wherever
your members may be.
Best of Credit and Debit Information | Spring 2015 | What's New with Cards?
27
A rewards program that is exponentially more rewarding
for members is bound to be more rewarding for you –
more likely to build loyalty and usage, and more likely to
help you stand out from the competition.
Just because rewards have become entry level for credit
card issuers doesn’t mean the rewards experience should
remain basic. By enhancing the experience – and the
usability – of your rewards program, you raise the profile
on everything you do.
This story originally appeared on CO-OPInsightVault.com
Best of Credit and Debit Information | Spring 2015 | What's New with Cards?
28
TIGHTENING UP SECURITY
5. New Tools
in a Changing
Environment
Some of the biggest news – and hottest innovations – on
the card front relate to security. In the aftermath of the
2013 Target breach – and the hundreds of breaches that
have occurred since – security remains a top priority for
cardholders, and never more so than in today’s world of
mobile commerce and increased spending.
In this section, find out more about member attitudes
toward security, and three security technologies that are
changing the way we pay – tokenization and Apple Pay,
EMV, and CardNav by CO-OP card controls and alerts.
Although each has its own niche, all three technologies add
up to the same result: Members want to use their cards
and card accounts, and they want to use them securely.
Underlying each of these stories is more good news for
credit unions. Not only do credit unions have the ability to
stay up to speed on security advances, but in some cases
they are leading the charge. Credit unions have been
among the earliest participants in Apple Pay. And with
CardNav mobile card controls and alerts, they are leading
the charge.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
30
Happy Birthday, Target Breach! Now Go Away.
By Samantha Paxson, Chief Marketing Officer
America lost a good deal of its financial complacency
when Target announced on December 19, 2013, that
data on millions of its customers had been breached.
Suddenly, everyone knew what they should have known
years before: Every retailer that handles your payment
data is a point of vulnerability.
• Provide identity theft protection: 63 percent
• Provide credit monitoring services: 58 percent
A survey conducted by the Ponemon Institute for
Experian Data Breach Resolution in April 2014 uncovered
some interesting insights into how consumers experience
data breaches:
• Between 2012 and 2014, the percentage of
respondents who had experienced a data
breach doubled.
• 76 percent of respondents who had experienced a
data breach reported stress as the primary impact.
• 62 percent had received two or more data breach
notifications involving separate incidents.
What did respondents want companies to do following a
data breach?
• Compensate victims with cash, products or
services: 67 percent
According to the survey, data breach victims want frank
communication. Asked what could have been done to
improve communication following a data breach, 67 percent
wanted more explanation of the risks and harms they might
experience; 56 percent wanted disclosure of all facts; and
33 percent didn’t want the facts to be sugar-coated.
Meanwhile, who is responsible for data breaches? CUNA has
unleashed a campaign – Stop The Data Breaches – to activate
consumers around the issue of retailer responsibility by
asking Congress to set consistent data security standards
for merchants.
It’s unclear whether consumers understand who is
responsible for breaches – on any level. Is it merchant
vulnerability or a card issuer problem that creates the
opportunity for a data breach? Is it the merchant or the
issuer who foots the bill? By raising awareness around
this issue, perhaps CUNA can help educate the public
about how data breaches unfold, and what credit unions
are doing in response.
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31
According to CUNA data, the Target breach alone caused
credit unions to reissue 4.6 million credit and debit cards
at a cost of $30.6 million.
In recapping the major implications that the Target
breach caused, we might like to now send the problem
of merchant data breaches off on a nice, permanent
vacation. That isn’t likely to happen. The Identity Theft
Resource Center reports that 720 data breaches have
occurred in 2014, exposing nearly 82 million records. Of
these, approximately 79 percent of compromised records
are attributed to “businesses.”
Fight Insecurity
•Improve communication. In the case of
communicating about data breaches and fraud, you
simply cannot be too good. Members are anxious about
this topic, so information is welcome and needed. This
subject is complicated: To the extent that you can help
members figure out clearly what’s happening and how
they can best respond, you’ll provide valuable help and
build trust with your members.
• Check out stopthedatabreaches.com. This
initiative is worth a look, not only for the political
action it seeks, but also for the information and
perspective it provides into the relationship
between consumers, merchant breaches and
credit unions.
This story originally appeared on CO-OPInsightVault.com.
What can credit unions do to address this ongoing
problem? Here are a few action steps:
•Make security a top priority. Give your credit
union the tools and resources necessary to combat
fraud – and to respond quickly and effectively to
fraud occurrences, including merchant data breaches.
Security technology, such as EMV and tokenization,
may be worth the expense in fraud savings. And
mobile card controls like CardNav by CO-OP can
reduce exposure.
• Want a step-by-step guide to preparing for
a merchant breach? Check out “Tackling the
Target Breach,” a 10-step guide for credit
unions. Read Now
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
32
Will Tokenization Eat EMV’s Lunch?
By Michelle Thornton, Manager, Core Products
With so much news about tokenization, it’s easy to forget
about that other security issue we’ve been debating about
this year: EMV.
In many ways, EMV is tokenization’s opposite twin. EMV
adoption has been years in the making. Tokenization hit
the scene like a lightning bolt. EMV works with an existing
format: plastic cards. Tokenization aims to make Plastic
cards obsolete. Tokenization carries with it the Apple
mystique. EMV? Not so much.
It’s not surprising, then, that many now wonder whether
tokenization will eat EMV’s lunch – making the issue of
EMV strategy and adoption irrelevant. Who needs EMV
when you’ve got tokenization, right?
brilliant at what it does. And each one is less brilliant at
standing in for the other.
Interestingly, too, the adoption of one may fuel adoption
of the other. That is, the October 2015 liability shift for
non-EMV transactions is prompting merchants across
the country to convert to EMV-enabled terminals. In
the process, they’re getting Near-Field Communications
capabilities thrown in for good measure. What powers
Apple Pay at the terminal? NFC. Deliberately or not, these
two really do work as a team.
So, just as you wouldn’t ask, “Should we prevent fraud or
just defend against it?” you don’t have to wonder whether
to choose tokenization or EMV. Choose both. Fraud is a
nasty business these days. Why not give it a one-two
punch?
Well, choosing between tokenization and EMV is a little
like choosing between your twin children. It’s the wrong
idea. For reasons that go beyond the sentimental, you
want both.
Have more questions about tokenization?
Download CO-OP FAQs on Tokenization
In the simplest possible terms, tokenization is designed
to enhance security on cardless transactions – mobile and
online commerce, as well as contactless point-of-sale.
EMV secures card-based transactions, using a specialized
chip housed right in the plastic. Each technology is
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
33
Does EMV Use Tokenization? Your Questions Answered.
By Bill Prichard Senior Manager, Public Relations and Corporate Communications
Caroline Willard
Michelle Thornton
As part of CO-OP’s “Innovation in Payments” webinar held November 18, Caroline
Willard, EVP, Markets and Strategy, and Michelle Thornton, Manager, Core Products,
fielded questions about the latest security technology. What did credit unions want
to know?
Q: Is it true that if you hover
over an EMV card or an
iPhone using Apple Pay,
you can capture the data
on it?
Q: Does EMV use tokenization?
A:One important thing to remember is that both of these technologies use
cryptograms to secure data. So the data that someone might capture as
part of an EMV or Apple Pay transaction isn’t repurposeable.
In Apple Pay, the token that is on a particular phone for Apple Pay is
specific to that phone: That phone has identifying data. So if a token were
used from any other device, it wouldn’t work because the cryptogram
wouldn’t have the identifying information from the correct phone.
On the EMV side, there are transaction counters that would show that a
new transaction wasn’t valid because the number and cryptogram were
already seen in a previous transaction.
A:EMV does not use tokenization; they’re two different technologies. It’s
possible to become confused because they do both use similar kinds of
technology, so you hear them talked about in the same breath. They both
use cryptography, but EMV and tokenization are two distinct things.
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34
Q: In Apple Pay, are tokens
assigned per card or per
transaction?
A:The token is static, but it’s specific to that phone and that card. So, for
example, if you’ve got a card and you’ve got three phones, you would
have three different tokens. Each phone would have a static and a unique
token for that one card.
Q: Would Apple Pay or EMV
have prevented the Target
breach?
What is dynamic is the cryptograms around those tokens. Those are
unique each time you do a transaction.
A:It wouldn’t have prevented the breach itself, but what EMV would have
done is prevented compromised numbers from being used to create
counterfeit cards. EMV cards are difficult to reproduce, so fraudsters
typically don’t attempt it.
The other part of the question was about whether Apple Pay would have
prevented it. Again, it wouldn’t have prevented the breach, but it could
have prevented certain types of transactions using those numbers.
CardNav by CO-OP, for a third point, would absolutely have been able
to prevent some fraudulent activity by alerting members to suspicious
transactions and enabling them to shut down their cards if there was
a compromise.
In each case, it’s not so much a question of preventing the breach, but
what happens with compromised numbers after a breach occurs. These
three technologies can absolutely help in different ways.
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35
Q: Can CardNav by CO-OP
be fully integrated with
existing CU mobile apps, so
that members can access it
using a single sign on?
A:We will be deploying on an API version of CardNav by CO-OP, so you can tuck
it into your existing mobile app and have it be accessible to your members
without having a separate sign on. That’s on our roadmap for 2015.
To watch a recording of the full “Innovation in Payments” webinar, click here.
Find out more about Apple Pay and tokenization for your credit union here.
Learn more about EMV for your credit union here.
Get the latest on CardNav by CO-OP mobile card controls and alerts here.
EMV IS UP
LOOKING SHIFTY
October 15, 2015
On this date, fraud liability will become the responsibility of
the non-EMV-capable party – card issuer, merchant, or both.
Who’s on the hook for fraud liability now, before the October 15
Call it the Year of EMV. The Smart Card Alliance reports that
an estimated 575 million EMV chip cards will be issued in the
U.S. by the end of 2015 – up from 120 million at the start of
the year.
deadline? Card issuers alone.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
36
8 Questions You Asked About CardNav
Ryan Zilker
By Samantha Paxson, Chief Marketing Officer
In CO-OP’s live webinar on CardNav by CO-OP card controls and alerts on October 22, 2014,
CO-OP’s Business Manager, Product Development, Ryan Zilker fielded questions from the audience.
What did credit unions want to know about CO-OP’s new remote control product for cards during
the recent webinar? Here are some answers.
1.Will CardNav settings overrule funds availability
and transaction limits settings that have been
made in our core system?
3.Is CardNav limited to cards on our own BINs?
Nothing in CardNav overrides what’s set in the core.
CardNav can make a recommendation, but if a user
sets a transaction limit of $600 when the host says
the limit is $300, the host settings totally override any
recommendation by CardNav.
2.How does CardNav affect Falcon Fraud
monitoring?
There really is no change to Falcon. The way the
process works is that if Falcon would shut a transaction
down for any reason, CardNav controls have no
impact. Falcon shuts the transaction down and an alert
is sent to the cardholder. It’s only when a transaction
passes all those initial checks that CardNav control
settings come into play.
The BIN must be owned by the credit union and
processed by CO-OP. You could not, for instance, load
your American Express card into CardNav.
4.Is CardNav only available as a separate app,
or can it be integrated into my credit union’s
existing app?
Today, what we are rolling out is a separate app. In the
future we will be able to make available a version of
CardNav that credit unions can brand as their own app –
or as a standalone API that they can make part of their
own mobile banking app.
When we consider all of these options, we feel that the
dedicated CardNav app offers the best experience for
your members right now.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
37
5. Is the CardNav app customizable so that my credit
union’s name and logo appear in the App Store?
When members go to search for the CardNav app in
the App Store, it is not branded to your credit union.
They simply go and search for CardNav. Once the app
is downloaded, from that point on the member sees
the colors and logo from their credit union.
8.Will CardNav be available to credit unions that do
not use CO-OP as their primary debit processor?
CardNav is available exclusively to credit unions using
CO-OP as their debit or in-house credit processor.
To watch a recorded version of “CardNav by CO-OP:
Leading the Charge in Card Control,” click here.
If you would like to have an app with your own
branding at the App Store level, you would need
a customizable app. That will be available, but the
program and pricing will be slightly different.
Find out more about CardNav at co-opfs.org/cardnav.
6.How does CardNav integrate with Apple Pay?
We’re currently in discussions with Ondot, our partner
on CardNav, to see if there’s any potential there.
7.Does CardNav send email alerts?
No, and that was a conscious decision on our part.
After reviewing the options of having email or SMS
text alerts, we felt that in-app alerts were where the
market is going.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
38
Q&A: Charged Up Over Mobile Security
Dr. Vaduvur Bharghavan
By Samantha Paxson, Chief Marketing Officer
Is this a good time to talk mobile security? After an eventful couple of weeks in the world of mobile
payments, we caught up with Dr. Vaduvur Bharghavan, CEO of Ondot Systems, CO-OP’s partner on
the CardNav app. We wondered how he was feeling about the potential market for new securityminded apps and the impact CardNav might have.
Q: As quickly as you can,
how would you describe
CardNav?
A: CardNav empowers cardholders to “remote control” their payment cards
from a smartphone app. Your members can lock or unlock their payment
cards with just a tap on the app; specify locations, merchants, purchase
methods, and spend limits to control card usage; and act instantly on
near real-time alerts. Credit unions are all about member satisfaction, and
CardNav promotes this goal by giving cardholders the security they need
with the convenience they want.
Q: Was the announcement of
Apple Pay a good thing or
a bad thing for a newlyminted card controls and
alerts app about to hit the
market?
A: Apple Pay in particular, and wallets in general, are complementary to what
CardNav tries to do. The purpose of Apple Pay is to make the iPhone your
payment card. The purpose of CardNav is to let you determine when and
where your payment card can be used, regardless of whether it is the plastic
card in your wallet or eCommerce or newer contactless payment methods.
CardNav is for cards what mobile banking is for accounts.
Q: Will CardNav change users’
relationship with their
payment cards?
A: We believe so. The payment card today is a lifeless piece of plastic. CardNav
allows cardholders to add intelligence to their existing card usage without
having to change the payment card. Your members can specify how their
own cards and their dependents’ cards can be used, and interact in near
real-time when they transact.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
39
Q: Are card controls and alerts
going to be a Next Big
Thing in financial services?
A: We believe that card controls will become a “best practice” for payment cards
in the industry. With increasing fraud and high profile card compromises
occurring monthly, and with increasing sophistication of consumers in using
their smartphones, giving consumers control and visibility over their most
prolific payment instruments is a natural thing to do.
Q: Do you have a favorite
CardNav feature?
A: My Location. My card should be active where I am, for in-store purchases.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
40
Hot off the Presses, CardNav Debuts at Bethpage FCU
By Bill Prichard, Senior Manager, Public Relations and Corporate Communications
On October 16, Bethpage Federal Credit Union in
Bethpage, N.Y., became the first credit union to launch
CardNav by CO-OP – a brand new app that enables
members to control their credit and debit card accounts
using their mobile devices. News spread quickly
throughout the credit union press:
“Growing concerns here regarding the risk of debit card
fraud led Bethpage FCU to be the first CU to partner with
CO-OP Financial Services and its CardNav app,” wrote W.B.
King in the Credit Union Journal on November 3. “After a
60-day trial, members are embracing the solution.”
The Credit Union Times also reported on Bethpage’s
launch of CardNav: “We had a successful pilot phase
with very positive feedback from our testers, which
included about 30 of our credit union employees,” Shanta
Sewnarain, Assistant Vice President, operations and risk
at the $5.7 billion Bethpage, said in the CU Times story
of October 29. “One tester shared that his usage control
was set as ‘my location.’ His location is New York and he
received an alert for a transaction in New Jersey. CardNav
immediately denied the transaction based on location.”
Sewnarain continued: “Another user told us, ‘I know
immediately when and where my card is used. I can
block specific transactions and merchants, and place my
spending limit on a budget. It is just awesome and I wish
we had this a long time ago.’”
Noting that fraud is an ongoing concern for consumers, with
interest in “tools such as transaction authorization controls,
instantly viewable transactions and text message alerts to
help them protect their accounts” on the rise, the CU Journal
pointed out likely benefits for Bethpage FCU as well:
“Although we are still in the early stages of the service,
we anticipate that the savings will be in the form of
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
41
reduced fraud losses,” Sewnarain told the CU Journal.
“We are currently targeting a specific group of members
to determine fraud savings, based on the users of
CardNav versus those who are not using it.”
“It is an optional tool for our members, so marketing and
member awareness will be key to increased usage, so
that both our credit union and our members will benefit
from reduced fraud,” Sewnarain continued.
Several industry publications responded to the Bethpage
FCU story, including DepositAccounts.com. Along with
a link to the CU Times story, the site commented: “It
would be great to see more financial organizations
offer this capability. Credit cards generally offer greater
protection than debit cards if they are lost, stolen, or
used fraudulently.”
To learn more about CardNav by CO-OP, click here.
Best of Credit and Debit Information | Spring 2015 | New Tools in a Changing Environment
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CARDS IN CONTEXT
6. Building
Relationships from
the Inside Out
Credit and debit remain two of the closest and most
frequent connections you can have with your members.
In the preceding pages we’ve looked at some of the ways
you can evolve your card programs and grow. But card
programs don’t exist in a vacuum. While you work on
sharpening your card game, consider how the relationship
you have with cardholders reflects on your larger brand.
The way you position your cards is, in large measure, the
way you position yourself:
• Technology leader
• Secure
• Easy and fun to use
• Fast, efficient
• Ready to provide service
• First in class
• Rewarding
As technology plays a growing role – and standards for
member experience and operational excellence continue
to rise – integration is a critical theme. This refers to the
integration of your various systems and technology. It
also means integrating everything you offer to members
into a single, coherent, brilliant package. The attributes of
your card program should be part of a larger identity that
includes the best of branch transformation, mobile and
online banking, ATM innovations, member service – and
everything you do.
Best of Credit and Debit Information | Spring 2015 | Building Relationships from the Inside Out
44
Is Your Credit Card Program Integrated Enough For You?
By Samantha Paxson, Chief Marketing Officer
Jennifer Kerry
Do you crave greater integration in your credit union work? We hear you. If you hope to improve your
member experience, the tools and processes you use must improve as well. Insight Vault caught up
with Jennifer Kerry, Vice President of Credit Issuer Processing at CO-OP Financial Services, to ask a
few questions about how CO-OP is applying the idea of integration to its credit programs.
INSIGHT VAULT: We’ve been
hearing a lot in the industry
about how consumers want
integration. Is the same true
for credit unions?
KERRY: In relationship to credit card processing, we hear all the time from credit
unions that they are looking to streamline and to reduce the amount of friction
they experience between systems. What I mean by that is, they want to be able
to view member data on credit, debit and ATM without logging into different
vendor systems. Ideally, many want to reduce the number of vendors as well, so
that they don’t have to worry about competing or incompatible systems.
That desire helped motivate CO-OP to partner with The Members Group for fullservice credit processing. Through that partnership, we’ve been able to offer
credit unions the best of debit and credit processing in an integrated whole. Our
systems work together, and so do we.
Our credit union clients use a single log-in credential for debit and credit card
platforms. By making it easier to view member data across platforms, we hope
we’re making it easier to understand and put that data to use.
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45
INSIGHT VAULT: Credit also has
many components to it. Is there a
need for the various components
to work together more effectively
as well?
KERRY: That’s true in so many ways. For a long time now, speed and integration
have been critical in fraud prevention and detection, for example. No one
questions the need for the best and fastest integration when the issue is fraud.
INSIGHT VAULT: Does that
create an integration challenge
for CO-OP?
KERRY: It’s a challenge we’ve been working toward for years now. The idea is for
credit unions to be able to upgrade and enhance their programs easily, without
costly and disruptive transitions. By thinking this way, we’ve been able to develop
some compelling new APIs we think credit unions – and their members – will love.
And they won’t require massive investments of time and resources to get up and
running. By making things easy, integration should provide an incentive for credit
unions and their members both to add and use the best technology available.
But we’re looking to apply the same principles across the board. We know that
having a rewards program is table stakes. Now the question is, how easy is it for
members to understand and use their rewards? We’re working on some exciting
new ideas to make member rewards more engaging – and easy for credit unions
and their members to use.
Our work on the front end should save effort for the end user, whether that user is
a credit union member or one of our member credit unions.
Learn more about CO-OP Full Service
and In-House Credit here.
Best of Credit and Debit Information | Spring 2015 | Building Relationships from the Inside Out
46
CO-OP Products to Up Your Card Game
CO-OP Debit
CO-OP Revelation
CO-OP Debit is a solution that not only combines PIN
and signature transactions into a single platform, but
provides a completely comprehensive portfolio of debit
capabilities. CO-OP Debit goes beyond the transaction to
provide everything you need to encourage debit card use
and prepare for tomorrow’s opportunities. Learn More
CO-OP Revelation was designed to help you manage your
card programs, engage your members, boost your bottom
line and ultimately grow your credit union. Learn More
CO-OP Credit: Full Service & In-House
A single platform for debit and credit streamlines
your operational processes and simplifies your
portfolio management by having a single trusted COOP account representative, a single invoice, volume
discounts and industry-leading fraud prevention and
management, as well as a fully managed loyalty
program. Learn More
Member Rewards by CO-OP
Drive debit and credit transactions with help from one of
the most powerful motivational tools used by large issuers.
Member Rewards by CO-OP provides incentives that
increase both member loyalty and appeal to prospective
members. It offers a tremendous opportunity to cross-sell
your products with rewards for any loan product or bill
payment. Learn More
CardNav by CO-OP
CardNav by CO-OP also adds another layer of security
to your in-house card programs. Members can
deactivate their cards in real-time when not in use and
set alerts that will let them know if a card is used in an
unusual or unapproved manner. Learn More
Best of Credit and Debit Information | Spring 2015 | Building Relationships from the Inside Out
47
More Fast + Brilliant Products from CO-OP
RealPay by CO-OP
CO-OP ATM
CO-OP ATM offers you the simplest yet most innovative
and comprehensive program available. It’s complete
with all the features you need to reduce costs, technical
issues, security concerns and overhead, allowing you to
implement the most effective ATM solution for today, and
plan for the future. Learn More
RealPay by CO-OP makes it possible for your members
to send money to anyone from the convenience of their
mobile phones and is offered as a function of Sprig, a
component of the new CO-OP Mobile or as an API which
can be integrated into your mobile offering. Learn More
CO-OP Digital Banking
CO-OP Mobile
The new and improved CO-OP Mobile offers a fullfeatured mobile solution for both iPhone and Android,
fully customizable with your credit union branding and
with more standard and optional features. Learn More
Core Integrated Solution: In partnership with Alkami
Technology, CO-OP offers a high-end core integrated
mobile and online banking solution including CO-OP Bill
Pay functionality. Learn More
Sprig by CO-OP
Sprig® by CO-OP is a virtual credit union wallet that
combines all the accounts a member holds from any
institution in the network together in one spot.
Learn More
Best of Credit and Debit Information | Spring 2015 | Building Relationships from the Inside Out
48