The national trade group for credit unions is endorsing FundsXpress as a provider of Internet services for its members.
After a yearlong search, the Credit Union National Association selected Austin, Tex.-based FundsXpress over four other competitors.
The endorsement is a major victory for FundsXpress, which was recently edged out by Atlanta-based rival nFront Inc. as the Internet provider of choice for the American Bankers Association.
Though FundsXpress counts more than 160 financial institutions as clients, including Union Planters National Bank in Memphis, it works with no credit unions, said executive vice president Gary E. Fendler.
Wes Millar, CUNA's director of new product implementation, said FundsXpress would market its product mainly to credit unions with more than $20 million of assets.
According to industry surveys, he said, most institutions of that size- about 26% of all credit unions-will decide within the next three years whether or not to offer Internet banking. (See related story, page 13.)
Mr. Millar added that CUNA chose FundsXpress in part because its product can easily be modified to serve the smallest credit unions that may eventually want to offer on-line banking.
About 61% of the nation's 11,392 credit unions have less than $10 million of assets. "There is a segment of the market that is not interested (in on-line banking) today that might be tomorrow," Mr. Millar said.
The number of credit unions that offer on-line banking has doubled, to about 600, in the last year, said Chip Filson, president of Callahan & Associates Inc., a credit union consulting firm in Washington. Mr. Filson expects that figure to double again in the next year.
The initial cost of FundsXpress' product is about $10,000. Users also pay the company for each on-line transaction.
Privately held FundsXpress also has the endorsement of several state trade groups, including the Independent Bankers Association of Texas and the Community Bankers Association of Illinois.