CUNA Payments Roundtable

Values Infuse Vancity CU’s Payment Systems, Decision-Making

CU’s payments products and services promote financial literacy.

May 7, 2014

Mohamed Ladak

“A payments strategy is not one solution but many incremental steps," Mohamed Ladak, Vancity Credit Union's vice president of payment solutions, told attendees at CUNA's Payments Roundtable Tuesday in Las Vegas.

Vancity, located in Vancouver, is Canada's largest community credit union with 501,000 members, $17.5 billion in assets, and 57 branches.

"We built our payments products and services to reflect our values of promoting financial literacy and helping members build healthy communities," Ladak said.

That translates to a credit card program that focuses on members' needs, not credit union profits, according to Ladak. Vancity's enviroVisa credit card has an 86% approval rate and it can be customized for high-risk members so those members also have access to credit. The card program uses a "wallet" approach to enable access to multiple payment types that address members' needs and preferences.

Each year, Vancity takes 5% of the profits from its enviroVisa card program and places it in the credit union's enviroFund. Those funds are then invested in environment-enhancing initiatives, such as sustainable urban food production and farmers' markets.

Ladak says Vancity's credit card program is coupled with a rewards program. Most members opt to spend their rewards money by moving the funds into their savings or loan accounts. About 70% of rewards points go to members' savings or loan accounts. Only about 25% of rewards points are redeemed for travel bonuses, and 5% are redeemed for merchandise.

Vancity believes in ongoing member education and awareness. The credit union contributes $1 million annually to its credit card financial literacy initiative.

It has produced two YouTube videos to help members understand the benefits of paying off their card balances quickly. "By posting these two videos, we actually make less money,” Ladak said. “But the videos are consistent with our values, and our values are our differentiator."

The credit union's vision statement is, "We make good money by putting money to good."

"Tap-and-go technology is very popular in Canada right now, so we're currently incorporating that technology into our payments systems,” Ladak said. “We're taking a wait-and-see approach to a mobile wallet until a dominant technology solution emerges and we know exactly what our members want."

He added that Vancity recently adopted a living wage policy for all of its employees. Doing so increased the credit union's minimum wage to about $20 per hour, which is about twice Canada's minimum wage.