Prizeout's New CUSO Supports Businesses, Increases Member Engagement and CU Non-Interest Income
By W.B. King
A new player to the credit union space, Prizeout CEO David Metz said he became enamored with the industry while visiting a credit union client last year.
“Honestly, I didn’t fully understand credit unions, but the more I have gone down this rabbit hole…the more I’ve learned by visiting with CEOs and seeing communities. It’s been incredible,” Metz told Finopotamus.
“I was out to dinner with MSU Federal Credit Union CEO April [Clobes] and three or four people walked up to her thanking her. One college student asked about a job,” he continued. “I’ve never seen that in banking. Normally, banks are the big, bad entity, but credit unions really care about their communities and that’s cool to see.”
The New York-based Prizeout is an ad-tech company working across the banking/credit union, gaming, crypto, gig economy, payroll and finance industries, Metz explained. The mission: to turn cash withdrawals into a growth solution for e-commerce and retail businesses.
In late February, Prizeout formally announced its new CUSO (credit union service
organization), Prizeout Partners, which is in partnership with nine credit unions (to date). Metz explained that the CUSO was created and will be managed by Callahan and Associates.
“We immediately saw the value in creating the CUSO for Prizeout,” said Amy Sink, CEO of the $1.7 billion Goshen, Ind.-based Interra Credit Union, which supports roughly 100,000 members.
“We believe in Prizeout’s technology and see it as a huge value-add for financial institutions in helping them grow, scale and provide more benefits for their members and communities,” Sink said. “From an innovation perspective, it’s even more exciting because credit unions don’t typically see a lot of the same innovation that bigger banks do – and this is built just for them.”
Not a Gift Card
Interra Credit Union, under Sink’s leadership, was a driving force behind Prizeout Partners, Metz explained.
“The first person I spoke to was Amy and she has become our biggest advocate,” he said. “We wouldn’t have gotten this done without her.”
Sink conceded dodging the first few calls from Metz because the pitch for the offering initially came across like a gift card.
“When David and I did finally connected, I realized it’s a lot more than a gift card — it’s more so a merchant’s reward incentive program,” she told Finopotamus.
In Sink’s view, aside from being a value-add for members and consumers, the solution will help to serve the credit union’s approximate 3,000 small business accounts.
“We are connecting our small businesses with our members,” she said. “Our pizza shops, hot dog stores, candy shops, furniture stores — not only do they get direct access to those consumers but it is a for-sure sale because they [consumers] have the [prepaid] money in hand.”
Growing the Local Merchant Community
Along with Interra Credit Union, Suncoast Credit Union, MSU Federal Credit Union, Patelco Credit Union, Stanford Federal Credit Union, Credit Human, Langley Federal Credit Union, University Credit Union and Collins Community Credit Union are Prizeout Partners’ credit union owners.
“When we learned about Prizeout’s technology and what it could do for our members and community, we were so excited,” said Suncoast Credit Union’s Executive Vice President/Chief Growth Officer Darlene Johnson.
The $15 billion Fort Meyers, Fla.-based Suncoast Credit Union serves more than one million members at 76 locations.
“We wanted to implement it as quickly as possible and were very excited to join the CUSO as we believe it will truly help our local merchant community grow and our members save more money,” Johnson added.
Metz explained that potential benefits include giving members more purchasing power. “The average 12% bonus shown when a member purchases a gift card helps them stretch their dollars further, which, especially with the economic downturn, is more appealing than ever,” he noted.
Additionally, the platform can also increase non-interest income, including interchange fees, and well as attract local businesses that are not credit union members yet, offering “risk-free” acquisitions. Merchants aren’t paying for impression or clicks, Metz said, but rather paying when they secure an actual paying customer.
“In a period of economic uncertainty and inflation, the partnership gives credit union members more purchasing power,” said Metz. “Credit unions are all about their community. This offering ties into their larger ethos of supporting their members and taking care of them. Additionally, it’s a model where everyone wins – the members, the community and the institution.”
Interoperable Rewards Program
Prizeout announced last year that its solution integrates with Q2’s digital banking platform. Metz noted that that the plug-play offering will also integrate with leading digital banking systems, including Jack Henry, NCR Digital Banking (already live), Alkami and Lumin.
“The toughest part of any product is getting on the product roadmap, but the fact that we have already integrated with those [systems] means that for every credit union that comes after, it will just be a turn of the switch for them to go live, which will be really nice,” said Metz, adding that Stanford Federal Credit Union will be the first credit union to go live (late February/early March).
Interra Credit Union plans to roll out the solution to membership by the end of March 2023, but not before beta testing the solution with employees, Sink said.
“This is our new rewards program, a way for us to offer on the credit side, but also on the debit side and we are really excited about it,” she said. “I would love to say that 50% of our consumers would buy one of these cards every day, but if I can get 10% of our membership, that would be outstanding.”