Credit Union Emphasizing Portability in its Payroll Card Program

NEW YORK – When the $7.3 million SAKS Fifth Avenue Enterprises FCU rolls out its new payroll card later this year it will emphasize an often overlooked attribute: portability. SAKS’ payroll cardholders will be able to take their cards with them if they eventually leave the department store chain and move onto another employer, an ability the credit union hopes will help members understand their continuing connection to the credit union. “We have a predominantly younger membership,” explained CEO Michael Masi, “and so we have tried to take a more Internet-based approach and one which focuses on those younger members’ lives,” he added. The sole-sponsor credit union has 5,300 members nationwide, Masi explained, all employees of the Saks Fifth Avenue Enterprises, a division of the larger Saks, Inc. So far, most credit unions which have begun payroll card programs have first approached their sponsoring employer or select employee groups to work out a deal to offer the cards to their members. But Saks may be the first credit union to have struck on the idea of issuing the payroll card to the member and then having them keep it, moving from employer to employer. “Essentially, this is much the same as direct deposit into an account,” Masi explained, “but it will be a card.” The card will carry the MasterCard logo and be identified with the credit union and not with Saks, he added. “We offer VISA already so I thought this would leave them open to coming to us for VISA,” Masi said. Saks had to face the fact that their membership is getting younger overall and that they are comparatively less settled than their predecessors, Masi explained, pointing out that many will change jobs as many as 15 times over the course of their careers. Masi admitted that the credit union would much rather have these young members open checking accounts, but the payroll card offers Saks a chance to keep a relationship with the members who don’t open accounts. “Plus, if I have a member that I feel uncertain of offering a standard debit card, I can offer them one of these,” Masi added. Members will be able to divide up their deposits between a checking account at the credit union and the card as well. Patricia DiSanto, vice president of client services for Genpass, said that the Pennsylvania-based firm has over 800 financial institutions, including credit unions, and that the portability factor has been part of the cards since the beginning. The direct deposit aspect has been there from the beginning, DiSanto explained, but it has not gotten as much attention because most of the discussion surrounding payroll cards has centered on benefits to the employers for issuing the cards and to the employees as long as they remain employees. Having Genpass’ PayCard Program issue the cards means that Saks markets the cards, handles their distribution and earns interchange from the transactions while not having to face the exposure the card program might offer, Masi said. Masi said that Saks had come to Genpass’ PayCard Program after turning to the firm for help with its ATM and debit card services. The credit union has three ATMs in Saks flagship store in New York, including two very productive machines in the store’s women’s restrooms. “Saks has a reputation for having very clean, well-lit and pleasant women’s restrooms,” Masi said. “The ATMs there do very well. In fact, I can even tell what kind of sales day the store is having by how much money is running out of the ATM,” he added. [email protected]