On Friday, July 24, Stan Kuss, CEO, announced CUETS' decision to outsource some portions of its Card Production facility. The decision is the result of a six month strategic review designed to ensure that CUETS will continue to position credit unions with the best in future Card Production products and services. CUETS' Card Production Customer Support area will continue to operate and seek increased business, while closely managing the relationship with our new supplier. Giesecke & Devrient Security Card Services (G&D SCS) will produce, fulfill (emboss and encode) and distribute the plastics.

How will these changes benefit credit unions? The review identified CUETS' Card Production strengths as customer service, administrative support, strategic counsel, collection and dissemination of industry knowledge, and an in-depth understanding of the credit union system. Kuss says, "Our staff are very committed to ensuring that credit union needs are met. Maximizing these strengths will enable us to focus on credit union relationships, while drawing on the output capabilities and volume advantages of a large supplier."

CUETS' new supplier also brings many benefits to the relationship. G&D is a world leader in the development and production of cards and card systems, including microprocessor and memory chips and magnetic stripe cards. G&D SCS itself was founded in 1963 as Security Card Systems (SCS) and maintains a dominant share of about half the Canadian market in secure plastic cards. Along with excellent back-up systems and a comprehensive disaster recovery plan, SCS also has ties to the credit union system. They already produce MEMBERCard Debit Cards for some credit unions and produced all the chip cards for the Mondex pilot.


Transition Process

Cathy Pisch, the current Supervisor of Card Production, will manage the transition of plastic fulfillment and distribution to SCS. It will occur in two phases.

Phase 1:

During Phase 1, CUETS will continue to produce cards, while preparing to move the fulfillment and distribution functions. By the end of Phase 1, card orders will be redirected from CUETS to SCS.

Phase 2:

During Phase 2, CUETS will review all Card Production processes to determine which functions belong with CUETS and which will be transferred to SCS.

It is CUETS' objective that both phases of the transition be transparent to credit unions and cardholders -- much in the same way the Card Production move from Alberta to Regina in 1996 was transparent. Joanne Vallat, Card Production Manager, explains: "CUETS' Card Production Customer Support area will continue to respond to credit union requests, much as they do now. During and after the transition, our staff will closely monitor & manage this new supplier relationship to ensure that the same high quality standards of product and service continue."


Other Impacts

CUETS reports no plans for changes to Card Production pricing at this time. Card Production pricing will continue to be determined as part of CUETS' overall pricing strategy to credit unions.

System changes are also unlikely. CUETS does not anticipate that any credit union / processor system changes will be needed. In early 1999, an in-depth analysis will determine for certain what - if any - changes are required. For those processors not using the standard incoming order layout for submission of card orders, however, it will be necessary to change to this format in 1999 C a requirement that CUETS would have made even without the transition. This change will likely be required in the third quarter of 1999. The exact dates for the format change will be published as soon as they have been determined.


Summary

Credit unions will benefit from CUETS' Card Production knowledge, expertise and service commitment, combined with the output capabilities of SCS. As Kuss points out: "We're bringing credit unions the best of both worlds. Whether it's MasterCard or MEMBERCard Debit Card production, we're adding value to the credit union system by bringing the volume of their business together. That means we can acquire the best prices, products, services and future technology for credit unions C and all in the context of great service."

Questions about the decision or the transition process, may be directed to Card Production Manager, Joanne Vallat at 1-306-566-1397. CUETS' Card Production Department is available at 1-800-385-6671 for all regular Card Production requests.

If your credit union does not currently use CUETS' Card Production services and you would like to find out how our new arrangements can benefit you, please call Card Production Manager, Joanne Vallat at 1-306-566-1397.