Credit Union National Association Inc. has created a national electronic funds transfer switch for member credit unions.

CUNA Service Group's card services division formed an alliance with Applied Communications Inc. of Omaha to operate the first national authorization center exclusively for credit unions.

The switching system will be available to individual credit unions or state credit union leagues. It can act as a one-stop transaction processing service, providing gateways and linkages to data processing companies and payment networks.

"The benefit to credit unions is that we will be able to provide them access to all EFT services without their having to deal with multiple service providers," said Elizabeth Taylor Quilliam, vice president of sales and EFT services for CUNA Service Group in Madison, Wis.

The Credit Union National Association, like the Independent Bankers Association of America, has long been noted for obtaining credit card processing and other services on members' behalf at prices lower than smaller members could find on their own.

The electronic funds transfer switching system brings CUNA's payments offering to a new level of sophistication.

The Applied Communications switch will provide a single point of access for all authorization services, Ms. Taylor said, including Visa and MasterCard, national and regional ATM networks, and shared credit union branch networks.

"Right now," she said, "credit unions often require multiple sources for these transactions. So this will be viewed as a big improvement."

The convenience of one-source switching is just one advantage, say CUNA representatives. Reduced costs are another.

"Quite often, a very, very small credit union does not have the negotiating power that others have," said Leah Stemper, debit product manager for CUNA Service Group. "We'll be able to offer better pricing since we will only be serving credit unions."

The CUNA card services unit decided to team with Applied Communications because of the vendor's leadership position in transaction processing technology, said Ms. Quilliam.

It will use the vendor's BASE24 software and Tandem Computers Inc. hardware to provide card authorizations and ATM-POS services to credit unions and credit union networks.

"BASE24 supports a wide variety of EFT transactions, including deposits and withdrawals at ATM, POS, and teller terminals, as well as purchases, cash advances, and returns," said Doug Parr, an Applied Communications vice president.

"Combined with the proven reliability of the Tandem hardware, this system provides the stability and advanced technology that credit unions need for future growth," he continued.

The CUNA unit plans to develop authorization and EFT programs in phases, beginning with debit and credit card authorizations, followed by gateway services, then ATM and POS terminal-driving services, said Ms. Quilliam.

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