SOUTH BEND, Ind. -
"It's like buying everything on sale," said Amy Sink of Teachers CU. "There is no doubt in my mind that every credit union in the country should use this product."
The product Sink is referring to is the Purchase One card, created by WesCorp's Procura CUSO, which takes the concept of corporate credit cards for business-related spending to a different level, she said.
"You hear people say, 'I have a corporate credit card, why do we need that?'" she related. "At about $10 million (spent on the Purchase One card) per year, I get 1% of that back. I was getting about half of that at PNC Bank. It really is like getting everything on sale."
How The Card Works
The card allows a CEO or manager to authorize employees to make business purchases from any merchant or vendor who accepts VISA, streamlining the management process of expense authorizations and approvals, spending limit adjustments, requisitions and purchase orders, invoice processing, check writing, expense reporting and account reconciliation by applying Internet technology to the purchase request/approval process.
Procurement rules and limits, signature controls and spending limits, including maximum transactions and discretionary limits are integrated into a web-based system and applied automatically to all purchase requests before transactions occur. The rebate opportunities are also attractive, and credit unions can determine for themselves just how they wish to pass them along, Sink said.
But the real magic, she suggested, is in the work flow that allows for more than just tracking of expenses.
"It really helps with our efficiencies from a cash flow stand point," she commented. "You can settle daily, weekly, monthly-and get some additional float, plus I don't have to cut so many checks."
In offering the card to SEGs, Teachers CU treats the card like a business loan. The $1.6-billion credit union underwrites the line of credit at a zero balance.
"For our first one, they were looking at $250,000 monthly. We charged an origination fee and did everything like a regular commercial loan. Then we sweep the ACH from a cash account to the line of credit. This one is a zero-risk deal because essentially it's share secured."
"One of our SEGs is a school system that runs coffee shops, but they don't want the kids to have cash, so they're given credit cards with limits," she related. "Plus, the teachers were having to handle petty cash. Now, instead of turning in itty bitty receipts, they get a card and tell the manager 'I need to buy $200 worth of supplies.' The money is put on the card, and away they go. They buy the supplies, and the card is back to zero."
Beyond selling the card, the card is helping to sell the credit union.
"It's something our business development people can use as a selling point when they go into a potential SEG," Sink observed. "It's also a fee generator."
