Metavante Corp. hopes to use its deal with U.S. Central Credit Union of Lenexa, Kan., to expand further in the credit union payment market.
The Milwaukee financial technology unit of Marshall & Ilsley Corp., which plans to spin it off next quarter, announced Tuesday that it would provide online bill payment services to about 200 credit unions served by Corporate Network eCom LLC, a credit union service organization that is majority owned by U.S. Central.
Dave Fortney, Metavante's chief technology officer, said it would work with U.S. Central to market a variety of services to credit unions, as well as to sell Metavante's bill payment services to more of the nation's 10,000 credit unions.
"It's intended by both sides to be a broader relationship across other payment products," Mr. Fortney said in an interview, though he would not discuss specific plans.
U.S. Central is the nation's only wholesale corporate credit union, functioning as a bankers' bank for 29 corporate credit unions around the country. As part of that role, it provides transaction settlement services for 8,800 credit unions.
Marcie Haitema, the executive vice president of correspondent services for U.S. Central and the presiding manager of Corporate Network eCom, said the credit union views online bill payment as an "absolutely vital" service.
"If you want to provide a sustained, excellent, product-rich, feature-rich service, it's a scale business," said Ms. Haitema, who joined U.S. Central in August 2005 from JPMorgan Chase & Co., where she had been senior vice president of its electronic funds transfer division.
The credit union analyzed the cost of continuing to develop its own service, concludeing that it "wasn't something we could afford to do," she said. "We could be a very effective, value-added reseller for someone else's services."
Mr. Fortney said that converting Corporate Network eCom's 200 current clients should be completed in the first half of 2008.
Metavante does not offer specialized core account processing for credit unions, though it does provide a variety of other services, Mr. Fortney said. Its Web site lists a variety of electronic fund transfer, card processing, image processing, and lending services, among others.
The credit union market "is an area we feel is a growth area for Metavante," he said. "We haven't gotten the same penetration there as we have with banks."
