LOS ANGELES-One of the first Check 21 providers in the northeastern part of the country is once again looking to bring in credit union business.
Direct Fed Payment Solutions, formerly known as Skyline's DirectFED, has re-launched its credit union focus. VP of Sales Ken Buren said there has been considerable interest in credit unions in alternatives to corporates for check processing.
Buren was on the board at Rutgers FCU in New Jersey when the credit union decided it needed to get in the Check 21 game. The credit union chose to go with Direct Fed as corporate credit unions were not offering remote deposit capture services at the time. About 20 other credit unions also quickly signed on with the fledgling firm, which has now processed more than seven-million checks totaling more than $6 billion in transactions.
When corporates did start considering those services, Direct Fed initially sought to become a partner instead of a competitor.
"Direct Fed had approached Empire Corporate FCU about a possible partnership but the design of the product did not fit well with the corporate model," Buren explained.
With many larger credit unions now dealing with the Federal Reserve directly, Buren believes that the segment is ripe for a vendor like Direct Fed, which, in addition to its line of products and services, also offers educational material on how to work with the central bank.
"Not only do we offer the standard remote deposit capture, but we also have business capture," he added. "We have teller capture, which will allow (credit unions) to position the scanners at the teller line so they can image the checks at that point."
The six-year-old company believes it offers pricing advantages. "If we didn't have to keep our account with the corporate credit union, we would close it and deal directly with the Fed (with Direct Fed)," noted Amy Prato, general office clerk at Binghamton, N.Y.-based BCT FCU.
When Aspire FCU rolled out Check 21 services three years ago it went directly to Direct Fed. The move has paid huge dividends, according to Branch Operations Manager Elaine Meredith.
With corporates likely to require member credit unions to contribute permanently contributed capital in order to receive their most competitive prices and rates, marginally attached CUs could be looking for other options. Buren was quick to point out that using Direct Fed and other vendors like it is not a wholesale repudiation of corporates and their services.
"It's not an all-or-none scenario. You can select the Fed for some products and services and you can continue to use the corporate if you want to," he said. "We provide an alternative and a lot of credit unions that don't know about the alternatives. DirectFed is very well positioned right now with what is going on in the marketplace. Our mantra is that we're not out to trash anyone's reputation, all we are trying to do is provide credit unions with information about the alternatives that exist."
