LAS VEGAS -
But the fact is, said Mike Randall, CIO at the $850-million credit union, the new service is more about "enriching the online experience."
"The response from members to Card HQ is not overwhelming," Randall acknowledged. "We were surprised that we had even five card sales in our first month. That's high considering we didn't advertise."
Card HQ is an online gift card store offered by Chantilly, Va.-based Online Resources Corp. (ORCC). The service allows members to purchase reloadable gift cards, ranging from $25 to $500, from the likes of JCPenney and Marriott, along with other clothing, coffee, restaurant and electronics retailers, through Silver State Schools' bill payment application.
Elsewhere in the U.S., the prepaid card market is on fire, bringing in $165 billion last year, and is expected to increase by nearly 10% per year for three years, according to Mercator Advisory Group in Boston. Nearly 80% of American adults purchased or received a gift card in the past year and more than 40% did both, according to an online survey by First Data Corp., Denver.
Whereas Randall expects card sales to steadily increase as SSSCU pushes the service, Card HQ is really about increasing member loyalty, he said.
"The convenience of gift card services is something members demand, and we want to offer it to them as part of a one-stop shop," explained Randall.
In just one Internet stop, Silver State Schools members now can access a broader range of payment services. Card HQ sits behind the Internet banking log-in page at SSSCU's website, next to the bill pay and funds transfer platforms.
Members click on an image of the desired card, then go through a transaction process where funds are debited in real-time from checking accounts as a function of bill pay. The card can then be mailed to the member in physical form, or issued virtually.
Though sales most likely accelerated during December as Silver State Schools began marketing Card HQ and members shopped for holiday gifts, the credit union declined to share sales figures. Even if sales don't pick up, Silver State Schools has little to lose, he continued. "On our part, there's very little involvement as far as time and money. And what we have to gain is fee income and member loyalty."
Silver State Schools does not charge an activation fee on top of the value of the gift card, said Randall. The card platform was implemented in September without a hitch, he added. "Online Resources basically took care of it all." Silver State Schools' branches also sell a branded Visa gift card, but it's not yet available online.
Though the service may remind some of early credit union websites and the faddish days of shopping portals, Card HQ is not a throwback.
"This is a more refined approach," Randall said. "We've honed in on the specific needs of our members. Our bill pay members are more online-savvy, so they're more likely to buy gift cards online. In addition, this product relates very well to the member's everyday life and relationship with the CU.
"In the past, online products were offered as part of a shotgun approach where credit unions blasted out the products to see what stuck," he added.
Card HQ capitalizes on ORCC's expertise with banking service providers, card issuers and billing merchants, according to Matt Lawlor, CEO at ORCC.
As such, Lawlor said he sees a bright future for a family of stored value products at ORCC, including payroll cards and virtual wallets.
FOR MORE DETAILS
* Silver State Schools CU at www.silverstatecu.com
* Online Resources at www.orcc.com
