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Prepaid Debit Card – Oregon Pioneer FCU

Credit Union :Oregon Pioneer
Assets :$21,100,000
Address :17884 Se Mcloughlin Blvd | Portland, OR 97267
Start Date :April 2008

Prepaid Card User Qualifications :

Any member in good standing can use the prepaid debit card.

Rates, Fees, and Terms :

  • $5 fee for the prepaid card, which is good for two years
  • $1 reload fee if card is reloaded on site
  • No reload fee if card is reloaded on-line, but process can take a couple of days
  • $.50 monthly fee charged directly by vendor to each active card

Vendors/Systems Used :

Illinois Credit Union League – Service Corporation (ILCUSYS) is the vendor. Reload information is processed by ILCUSYS each morning and at noon for this credit union. Therefore, members who come in to have card reloaded after noon will have to wait until the following morning to access funds. For those members who go on-line to reload cards, ILCUSYS uses an ACH process to obtain funds and load the value to the cards. Thus, a delay of three to five days can result before the member can access funds.

Target Market :

  • Those who don’t qualify for the CU’s checking account or the account has been closed because of abuse or excessive NSFs.
  • Those who want to limit any potential account theft through the Internet or in public places
  • Teens and students when parents want to provide limited access to funds

Marketing Strategy :

  • Flier inserts are used with CU statements
  • Lobby posters
  • The CU’s website markets the product in this manner:
    • Can’t get a checking account – want to limit access to your savings or checking account – teach your school-age kids good spending habits? We offer a reloadable Visa Debit card for all the reasons above and a whole lot more. FUND IT – SPEND IT. Then check online for all the purchases you made. ATM access allows you cash withdrawals. Load limit to $5,000.00. Contact us today to find out more about this multi-purpose card.

Program Results/Statistics :

  • 75 – 100 outstanding cards (approximately 3% of members)
  • Load amounts range from $50 to $5,000
  • CU initially did not charge a reloading fee when members came into CU to load card; it implemented a $1 fee in 2009 which caused some resistance from members. But they have the option to load on-line for free, although the delay is longer.
  • Otherwise, no complaints from members using the card

Member Benefits :

  • Provides members who have difficulty managing a checking account with a way to access their funds without carrying lots of cash or paying for money orders
  • Provides members with a safer method to make purchases on the Internet
  • Provides parents with a means of helping their kids learn how to budget money

Additional Information :

Oregon Pioneer began offering a prepaid debit card about two years ago to help members who had difficulty managing a checking account and were complaining about the cost of purchasing money orders, according to Mark Davis, CEO. But the card is actually cross-sold to all members, not just those with checking issues.

Davis, himself, uses the card when making purchases on the Internet and when charging meals at a restaurant. Card fraud or identity theft can be mitigated, he said, by using a prepaid card rather than a traditional credit card. Although Oregon Pioneer uses a batch mode to update reload information to cards, Davis has not had member complaints with the system, as long as they understand the delay times.

Although the card can be used at gas stations, hotels and rental car agencies, members are cautioned about using the card for these uses because of potential holds that can be placed on the card. For example, Davis states, a gas station may put a $50 hold on the card when it is used for gas purchases and it can take a couple of days for the hold to be released. In the meantime, the card holder cannot access that $50 if needed. Hotels and rental car agencies can impose even higher holds.

Davis would like to see more parents use the card to teach their children money management and budgeting skills. When students are making back-to-school purchases, he says, parents could put a set dollar amount on the card for those purchases and help their children learn about costs and choices. “Kids would learn that school isn’t free,” says Davis, “or that their parents can’t buy everything they want. The prepaid card can help children experience financial management and decisions.”

Additional Information :

Oregon Federal Credit Union has partnered with ILCUSYS to offer its members a reloadable, prepaid card product. Members who don’t qualify for the CU’s checking account are primary targets, but it also can be a good tool to help teens and students learn money management and budgeting skills.