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CU interconnectivity improves Guatemalan service
CHIQUIMULA, Guatemala (6/16/09)--An interconnectivity device that links Guatemalan small businesses to local credit unions allows members to access their accounts and pay for purchases electronically, boosting business for merchants and credit unions.
Click to view larger image Brian Branch, World Council of Credit Unions executive vice president and chief operating officer (left), visits Guatemalan sporting goods merchant Flavio Sontay to discuss point-of-sale (POS) technology. The POS device can be seen in the foreground. (Photo provided by the World Council of Credit Unions)
Sporting goods merchant Flavio Sontay knows the way to improve his competitive edge is to offer products and services his customers need. In addition to stocking a complete line of soccer balls, athletic shoes and other related merchandise, Sontay is installing a point-of-sale (POS) device that links him to Cooperativa de Ahorro y Crédito Integral San José Obrero R.L (COOSAJO), the credit union that supports his two retail stores. The POS device will enable customers who are credit union members to pay for purchases at the store electronically and withdraw cash from their accounts. “The young people who come here to buy sports equipment are always in a hurry,” said Sontay, whose stores serve Chiquimula, an eastern Guatemalan city of more than 300,000 residents. “They do not want to stop at the credit union to pick up cash and then come to my store to shop, so I will let them do both things here.” In addition to providing convenience, both Sontay and COOSAJO will make a few cents on each transaction. That’s different than the 8% fee the merchant would pay for sales charged on an international MasterCard or Visa, which Sontay now feels less obligated to accept. The POS device is an added advantage that has attracted more businesses to the Central American country's credit unions, according to Brian Branch, executive vice president and chief operating officer for World Council of Credit Unions (WOCCU). “The credit union-issued debit cards work throughout Guatemala's credit union system” Branch said. “Members can access their accounts from any credit union branch, ATM or POS device across the country, paying just a few cents per transaction for the convenience.” Guatemala’s electronic transaction network, similar to those that link credit unions and their members in several Latin American countries, is also part of WOCCU's outreach development plan. Guatemala’s network follows networks already established in Ecuador and Bolivia and is the model for services soon to be offered in Peru. The emphasis on electronic transactions is a new addition to development strategies that in many countries previously focused on marketing efforts and brick-and-mortar facilities, Branch said. “Much of WOCCU's current outreach strategy involves technology applications that expand services into rural areas,” he explained. “We have successfully experimented with service extensions through ATMs, POS devices, personal data assistants and mobile phones.” COOSAJO began its electronic efforts by installing lobby ATMs to reduce teller traffic in late 2008. It took some time for members to warm up to the machines for several reasons, including past negative experiences with electronic transfer technology at other institutions. The credit union addressed such concerns by stationing a receptionist near the ATM who trained members on the equipment. The ATM has since been moved to an enclosure outside the credit union, where transactions have tripled since its initial installation. With the growing acceptance of electronic transaction options, particularly POS devices, merchants like Sontay, have seen increased sales and modest fee income. COOSAJO and other credit unions also benefit from growing acceptance of the technology by members and other area businesses. “The credit unions are gaining trust, along with higher transaction rates, by providing services from gas stations, convenience stores and local restaurant franchises,” Branch said. “They see the greater benefit of being able to serve more members more effectively and more often.”
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