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One great union

The Co-Op Network, the country's largest network of credit union ATMs, is more than doubling its number of machines in a deal with Access Cash International, one of the country's largest ISOs.

January 8, 2002

Credit unions often win customers with their personalized service and attractive interest rates. But ATM access has long been a challenge for credit unions, which typically do not have the capital to invest in large networks.

The North Carolina State Employees' Credit Union, based in Raleigh, is the country's largest credit union ATM deployer, with about 700 machines. San Francisco-based Bank of America, on the other hand, has some 13,000 ATMs in its network.

The Ontario, Calif.-based Co-Op Network, which has 772 credit union members, is doing its best to narrow the ATM gap between credit unions and other financial institutions. By agreeing to offer cardholders of other member institutions surcharge-free access to their ATMs, Co-Op Network members broaden their ATM reach without actually investing in machines.

The Co-Op Network will more than double the size of its 5,000-machine network, bringing it into BofA territory, under a recently announced agreement with Access Cash International, one of the country's largest ISOs.

Gene Polito, chief operations officer and executive vice president of the Co-Op Network, said, "This will help us to achieve one of our goals, to attain a national ATM footprint for credit unions."

At least 6,500 of Access Cash's 8,500 ATMs, which are located in drug stores, gas stations and other retail locations, will become part of the Co-Op Network. All of the machines will be co-branded with Co-Op Network and Access Cash logos. In many locations, the Co-Op logo will also appear on the welcome screen, Polito said.

Polito said the Co-Op Network will promote the ATMs to its members through mailings and the ATM locator on its Web site.

The Co-Op Network previously had ATMs in 42 states, with most located in California, Nevada, Oregon, Washington, Utah, Colorado and Michigan. St. Paul, Minn.-based Access Cash has machines in Canada and in every state but Alaska and Nebraska.

A pilot has been under way since January, with a small number of ATM sites in Arizona and Michigan. Polito said feedback from Co-Op members has been positive.

In addition to better serving its existing members, Polito said the Access Cash deal offers an opportunity for the Co-Op Network to grow its membership.

"With this relationship, we become not only the largest credit union ATM network in the country, but also the largest off-premise network in the country," he said. "It's of tremendous value for our members to be able to provide convenient surcharge-free ATM locations for their cardholders."

While financial terms of the deal were not disclosed, Bryan Gray, Access Cash's vice president of sales and marketing said, "There will be compensation between the two parties."

Polito said that in addition to a flat fee, the Co-Op Network will pay Access Cash a transaction-based fee to make up for the loss of the surcharge on transactions conducted by Co-Op cardholders.

The real value for Access Cash and its merchant clients, Gray said, is the potential for increased ATM transactions by Co-Op's nine million cardholders, who may in turn spend some of that money where they got it. According to a Co-Op Network release, it processes nearly 40 million ATM transactions a month.

"We all win as we grow," Gray said. "If there is any truth to the statement that ATM volumes are declining, we can counteract that by bringing more customers through the door. With more customers, the merchants are going to sell more chips, soda and candy."

Access Cash manages machines for a number of financial institutions. When a financial institution brand is added to the machines, both foreign and on-us transactions usually increase, Gray said.

The Co-Op Network has added the ATMs of several other credit union networks, including CU Access (Oregon and Washington), CU Link (Colorado and Wyoming), Quantum (Michigan), CU Services, Inc. (Tennessee), and Midwest ATM Company (Missouri and Kansas), to its network in the past two years.

In September the Co-Op Network renewed its processing contract with Scottsdale, Ariz.-based eFunds, which is an investor in Access Cash. The eFunds connection "was somewhat of a catalyst to move the (Access Cash/Co-Op Network) relationship along," Polito said.