Pricing Changes, Lack Of Trust Could Be Deciding Factors
BROOKFIELD, Wis.-One person sees an emerging market in which the liquidity and payments services offered by corporates will be divided among different providers as the market evolves.
Mark Atchison, VP of offerings development for Fiserv, said so much change is afoot, there will be a number of companies, CUSOs and other sources required to fulfill all the services corporates have provided to natural-person CUs.
"Who will fill the void? All of the above," he said. "Some of the healthier corporate credit unions are trying to position themselves to get the natural-person credit union members of the conserved corporates. Many of our clients are talking about forming CUSOs. The Fed clearly is going to be involved in item processing. And service providers, including Fiserv, will play a role."
Fiserv has avoided directly competing with corporate CUs over the years, but with the landscape changing Atchison said it wants to talk to credit unions and tell them if they are thinking of making a move, "please talk to us because we have some great offers."
"Any time there is change there is definitely opportunity," he added.
Fiserv does not operate in the liquidity/currency/cash services space as it is not a bank, but it is a "major player" in payment services, including item processing, Atchison said, citing its 3,200 item processing clients and the 850 institutions that use its clearing network.
"These are doing 28-million items per month, so it is a robust offering," he said. "In addition, we have branch capture, teller capture and merchant capture available today, with consumer capture partially available depending on online banking platform. Mobile capture, with mobile phone pictures of checks, is a work in process."
Fiserv has an ACH transmission platform it calls XRoads. Ancillary to that, it does ACH origination. It also has a wire funds transfer capability known as WireXChange.
"We offer consumer bill pay networks, electronic funds transfer and other things corporates offer. Some credit unions have told us they believe that payment services were subsidized by liquidity services the corporates offered, and going forward the corporates will therefore be forced to raise prices on payment services. The prevalent belief seems to be there will be changes in price structures, even if they stay with the corporates."
Anger Toward Corporates
Many of Fiserv's clients are "put off by the whole corporate system," Atchison reported. In effect, he said, "the corporate system has apparently failed and natural-person credit unions are being asked to shore up a failed system. There is some hesitancy around that because it failed once, how can they believe it won't fail again?"
Because of this sentiment many scenarios could play out, Atchison predicted. He said there could be one corporate entity that handles liquidity and cash services, but quickly added, "I don't think that will happen, but I think there will be a division between liquidity services and payment services, and there will be a lot more transparency. Both will be required to operate at some level of profitability."