EDGELEY, N.D.-A conversation during the 2012 CO-OP THINK Conference helped generate one of this year's three finalists' ideas for the 2013 CO-OP THINK Prize
Deborah Larson, a branch manager at Dakota Plains CU here, said that while sitting with a group from the Iowa CU League at last year's conference, the conversation turned to one of the biggest challenges CUs face: how to get members to bring over their checking accounts from other FIs where they already have automatic payments set up.
For this year's THINK Prize, Larson has proposed a web-based switch kit that would allow the potential member to enter the companies with which they have automatic payments set up, and the CU then notifies those merchants to convert those debits to the credit union.
"With bill pay interfaces I think that would be pretty easy to do, because we have most of the merchant information in a system somewhere," said Larson. The $55-milion Dakota Plains currently uses a paper switch kit to help the potential member identify which merchants they will need to contact to switch payments, "but the onus is on them to get the information sent to the merchant."
Larson's idea is timely, given how many consumers have not joined due to perceived hassles related to switching automated payments. Larson's business plan notes that this kind of e-service option has an appeal to consumers age 25-50, a hotly contested demographic for credit unions.
The branch manager said she researched how much it would cost to develop her idea, including meetings with various vendors and app designers. She declined to say with which vendors she spoke, but estimated that the majority of the $10,000 prize money-furnished by MasterCard-would cover most of the roll-out costs "unless it got a little more involved than what the initial analysis is."
A Universal Switch Kit?
Larson is hopeful the service could be offered at no cost, and believes a universal web-based switch kit service could be made available to CUs of all sizes.
Larson, who once worked with the Maine CU League, was on hand when ATM and point-of-sale network CU24 was developed, and she said she could see a similar trajectory for an online switch kit that starts small and grows.
Should she win the $10,000 prize, Larson said she believes that her idea could be ready to roll out within six to 12 months. She said she's surprised no one else had launched such a solution. "Maybe the devil's in the details and we'll get into it and the compliance end of it is a nightmare," she said. "It just seems so obvious, and with what we have available to us today, I don't know why we wouldn't be able to interface (with most bill pay networks). The information is already there."
Larson is not obligated to use the prize money to develop the project if she wins, but nor are CO-OP or MasterCard required to pursue the idea. She said she was not deterred by any of that. "I understand the idea is to get people to think innovatively, but what's the point of doing that if these ideas are never going to come to light?" she said.
