Payments Contracts: Top 5 Key Considerations

​Payment solutions are one of the most essential products credit unions offer to differentiate themselves from the competition.  Choose the right processing partner! 

Payment solutions are one of the most essential products credit unions offer to differentiate themselves from banks and other competition. That is why selecting the right processing partner is particularly critical to member satisfaction, retention and growth. The following are a few things to consider when making the difficult decision of whether to stay with your current payments processor or to convert to a new partner.
 

1. Review Your Contracts – Many credit unions are not familiar with key provisions of their current agreements, particularly in regard to the termination clause or notification period. We have seen terms get extended as new enhancements or product features are added. We would recommend a thorough contract assessment of your payment contracts. 
2. Understand Your Entire Cost – When evaluating multiple proposals, ensure proposals are inclusive of all related fees, any pass through, network, core, card production, and implementation charges. If a significant price disparity exists, it could mean fees were omitted. It can be helpful to have each of the key areas subtotaled, to determine if any areas are missing. 
3. Define Your Vision – It is important to establish a clear vision of what you are looking for from both a member and credit union perspective. Evaluating your current portfolio and noting what services you are satisfied with, and what you want to include in the future is a great exercise because the ideal time to add new services is at the start of a new agreement. Be sure to ask what features and functionality that you don’t currently have are on the proposals that you receive. 
4. Reputation Cost of Poor Service – Established service level agreements for optimal staff and member experience can make a big difference in the credit union and member experience. Low quality service can have a profound effect on your credit union’s reputation. The cost of bad service should be considered when choosing a partner, because not all costs are seen directly on the balance sheet. 
5. It’s All About Connections – In a digital-first world, ensuring all your member access points and delivery channels work seamlessly is a must. Ask for demos and API integrations with core, mobile and online banking providers. Members are looking for all the functionality of the major card brands, so determine how your card could match up.

There isn’t a one-size-fits-all approach to evaluating your payments partnership, but there are key components that should be measured when evaluating your current payment offerings and in considering a future partnership. LSC takes a consultative approach to the payments partner evaluation process, and can help you understand what to look for in all proposals, including our own.

Todays’ article was written by Steven Ryniec.  At LSC, our philosophy is simple- we help our credit unions compete. We are your comprehensive, one-stop shop for payment services. Our team works directly with your credit union to create a new game plan to make you stronger and increase your wins. The bottom line is it's our job to see credit unions succeed.  Visit our website to learn more or contact Steven Ryniec, AVP Sales and Channel Partnerships.