HARRISBURG, Penn. – The Pennsylvania Credit Union Association is looking for a credit union that would be willing to test a new VISA branded payroll card with one or more of its sponsors or select employee groups, according to Michael Wishnow, Vice President of Communications for the Association. Wishnow said that the Association's card issuing arm had become interested in the payroll card and that specific credit unions had become interested as well. The credit unions and Association needed to check with NCUA to make sure that credit unions could issue such cards to the sponsor or SEG's non member employees, Wishnow explained. NCUA ruled that they credit union can issue the cards to non-member in early September of this year. In its opinion letter to the Pennsylvania Association, NCUA ruled that credit unions could issue non-members payroll cards as one of their incidental powers. The Association then had to wait for its processing partner, Certegy, to overcome the technical hurdle of being able to issue and manage the cards, and Wishnow said that the firm had done so. "We are looking for a credit union to test the product," Wishnow said. "We thought we had one but that appeared to fall through," he added. Wishnow declined to say which credit union had not been able to beta test the product after all. Tim Kaliban, assistant vice president for Product Development for Certegy, reported that the processing firm, based in Alpharetta, Georgia, was open to partnering with other credit unions besides those from Pennsylvania. Certegy was still in the testing phase with the product, Kaliban said, but is ready to test with more than one institution. The innovation that drives the payroll card allows the employer to pay a card recipient in just the same way as the firm pays its employees with bank accounts, Kaliban explained. But instead of having the funds go into a member's account, the money goes through Certegy directly onto the card. The card issuing credit union maintains the bin number for the card and everything else, but the paycheck funds are credited directly to the card as opposed to being placed in an account. Kaliban said that the employer pays the costs for getting the money onto the card, but added that those costs are no more than the costs of making direct deposits to employee accounts. The average employer will save a lot of processing and personnel expense by not having to use paper checks any longer. Employees benefit from having access to the card which is widely accepted and which has the same consumer protections in regards to charge back and loss prevention that other VISA cards have, Kaliban said. The credit unions that issue the cards will benefit from the interchange income the card transactions generate, Kaliban pointed out, as well as possibly gaining an opportunity to offer credit union membership to non-members. "From our perspective this is just a win-win product," Kaliban said. -

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