RANCHO CUCAMONGA, Calif.-CO-OP Financial Services hopes the model used in one of the oldest staples of credit union cooperation, the shared branch, can drive new digital commerce innovation such as person-to-person payments and mobile remote deposit capture.

CO-OP, which has about 1,400 CU participants in its shared branch program totaling about 4,400 branches, has extended components of the shared branching model to digital commerce, using centralized processing resources to allow members to access mobile payments and other digital capabilities.

In this model, a member's account, routing and transit numbers can be used to accept and process transactions among the large network of credit unions, similar to the way a member of one CU can walk into the branch of another and perform transactions. Only in this case, the member is using mobile banking to transfer funds, execute a P2P payment, access digital banking at a branch, or make a deposit via a mobile remote deposit capture app that's downloaded from CO-OP's shared tech bench and processed via the centralized network.


Making It Simple

"We've even simplified it to the point where a consumer doesn't have to put a routing or transfer number into the credit union's mobile device to execute a transaction. The member just has to pick a credit union name from the list of participants, put in the account number and we're off and running," said Jim Hanisch, EVP-network operations and corporate development for CO-OP.

CO-OP's electronic payments processing business has already been expanding. It established new annual, monthly and daily transaction volume records in 2012. It hopes that by offering a simple way to execute mobile transactions, that growth will increase further, as will its ability to offer cross-institutional transaction capabilities not available in banking.

"Shared branching is a stable, slow-growth type of business. We're not only capturing the deposit items, but we've also got a couple of pilots going in person-to-person payments and have a huge effort in teller automation," said Hanisch.

The shared branch model has been used by CO-OP to centralize CU and intra-CU commerce for decades. Hanisch says that if you were "look under the covers," the CO-OP digital banking model operates similar to an EFT switch, or a means to capture, authorize and route payment initiated by different payment modes.

"The difference is that rather than being activated with a card and PIN, the member's routing number, transit and account number are used. That's something the banking industry doesn't have yet-a standardized way (across institutions) to electronically access an account in an online manner in real time using routing, transit and account numbers."

CO-OP, which is also accelerating its chip and PIN migration, uses mobile banking technology provided by mFoundry and handles its transaction processing in-house. Hanisch said CO-OP should be well-positioned to take advantage of growth in mobile commerce.

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