Unlocking Credit Union Success: Navigating Strategic Payments Partnerships

By Ken Lowy, NewtekOne
July 9, 2024

Research suggests that aligning with a dependable payment solution can significantly impact both member satisfaction and loyalty by helping your members avoid financial losses, security risks, scalability issues, reputational damage, and poor member experiences. Understanding the benefits of the right payment provider for both members and merchants can further solidify a credit union’s position in the market, drive growth, and foster lasting relationships. Moreover, credit unions must remain vigilant of third-party payment platforms’ potential impact on member banking relationships, highlighting the need for exclusive services to retain and attract members.

When doing due diligence to determine which payment provider is the right fit for the members of your credit union, ask yourself the following:

• Does the payment provider reduce costs & improve profitability?
• Does the payment provider keep both business and client information secure?
• Can the payment provider scale with your business as it grows?
• Does the payment provider grant access to funds in a timely manner?
• Does the payment provider provide around-the-clock U.S.-based customer support?
• Does the payment provider stay current with new technologies?

If you unfamiliar with any of the above, read on to learn more about what features to look for with a payment provider to help your members drive bottom-line growth while maintaining a strong market position:

Increased Cost Efficiency

Credit card processing fees eat into the bottom lines of business owners. An easy way to increase profits and drive growth is by partnering with a payment provider that allows your members to keep 100% of their credit card sales for both in-person and e-commerce purchases by passing the technology fees on to the card holder.

This option offsets transaction costs by displaying two totals, one higher price for card payments, and one lower for cash payments. The consumer chooses which way they would like to pay. If a card payment is selected, the higher amount is processed, and the fees are covered. If cash is selected, the purchaser will receive a receipt with a line-item discount for paying with cash.

Regardless of the decision, the consumer receives transparent pricing while your credit union small business members receive the full amount from each transaction, increasing their bottom line.

Enhanced Security

In 2023, the average cost of a data breach in the U.S. was $9.48 million. To protect your members' business reputation and customer relationships, ensure your payment provider has solutions to keep their business secure, protect cardholder information, avoid fraudulent activity, and reduce data breaches. An example of enhancing security includes partnering with providers who require merchants to validate their compliance with PCI-DSS as an additional measure to prevent theft and fraud.

Scalability

As your members' businesses grow, their payment provider needs to be able to handle the additional transaction volume. Without the ability to scale, their business can experience delays in processing payments, increased workload for staff to process payments manually, and less convenient checkout experiences for their customers. These challenges can lead to lost sales, higher labor costs, increased errors, and poor customer experiences. Ensure your payment provider can scale with your members’ businesses by having the ability to increase transaction volume, integrate new technology into existing systems, and add new features as the business grows – without compromising performance.

Enhanced Cash Flow Management

Your members need faster payouts to access their funds and run their business effectively. Having access to their capital allows their business to easily invest in expansion opportunities, purchase materials, and pay overhead, or additional expenses. An easy way to access their funds and put their capital into their own hands is to align with a payment provider that offers instant funding /same-day funding or at the very least, next-day funding. Quick access to funds allows your members to receive their sales right after credit card transactions have been posted, instead of waiting 3-5 business days.

Customer Support

Many payment providers rely on chatbots, AI responders, and international call centers to serve as a support system for business owners. Frankly, this isn’t good enough in today’s environment.

Seek a provider who wholeheartedly supports your members and equips them with service centers that provide human support around the clock and are 100% located in the U.S. This exclusive service is hard to come by but is necessary for businesses who want to drive bottom line growth in today's competitive environment.

Access to New Technologies

Payment providers who do not stay current with today’s payment technologies will cause their clients to lose their competitive edge and suffer an increase in cart abandonment rates.

In today’s quickly evolving technological environment, seamless and easy payment methods are necessary to stay current and drive sales. Having multiple methods of payment such as mobile payments, contactless transactions, digital wallets, and credit/debit cards, allows the consumer to easily and quickly pay for their goods. Alongside these payment methods, you also want a provider who includes data analytics to help merchants understand consumer behavior and optimize their offerings.

Drive Bottom Line Growth

Partnering with the right payment provider is essential for business owners to navigate the complexities of today’s competitive financial landscape and ensure long-term success. To help your members drive bottom-line growth, maintain a strong market position, and enhance their reputation, align with payment providers that offer robust, secure, and scalable payment solutions.

Cost efficiency, enhanced security, scalability, cash flow management, superior customer support, and access to new technologies, should all be prioritized by a third-party platform so that your credit union can offer this solution with confidence. This strategic alignment will not only reduce members' business risks but also improve their profit margins while increasing member satisfaction.

Connect with NewtekOne to learn how they can help you drive membership growth and operational excellence at an attractive price.

Originally published on CUInsight, June 2024.

About NewtekOne

Businesses expect more and NewtekOne (NASDAQ: NEWT) delivers core solutions that help businesses grow. As a partner, NewtekOne provides SBA lending services, business financing, merchant processing, payroll, insurance and website/technology services that credit unions can offer to members.