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Nationally branded products help smaller banks stand out

CHARLESTON, W.Va. -- It's a David vs. Goliath scenario: small financial institutions with limited marketing budgets trying to get their products known while giant institutions use big budgets to promote their national brands.

Now some of the little guys are joining forces to market products using the Kasasa brand name.

One is Pioneer West Virginia Federal Credit Union, headquartered in Charleston, which began offering a Kasasa-branded checking and savings account on Jan. 28.

Shannon Bradley, Pioneer's vice president of member services, said members who sign up for Pioneer's free Kasasa checking and savings accounts and meet three key criteria receive a 3 percent annual yield on a checking account balance of up to $5,000, 0.25 percent on checking balances above $5,000, plus refunds on automated teller machine fees nationwide.

The criteria: Use the Pioneer debit card for at least 12 point-of-sale transactions a month; log onto online banking at least once a month; and sign up for e-statements.

"These behaviors save us money," Bradley said. "We reward them for that."

Members who sign up but don't meet the criteria in any given month receive a 0.05 percent dividend on their checking and savings balances and qualify the next month to earn the higher rate.

"You can have personalized service and get something back," Bradley said. "And that's what we're about."

Pioneer has about 13,000 members. "At least 200 members have already converted (to the Kasasa-branded accounts) because they understand it's such a wonderful product," Bradley said.

"This is a Pioneer product," she emphasized. "We designed it. We decide what behaviors we'll reward. We have control over that rate." The credit union's members still do business directly with Pioneer, and their accounts are still insured by the National Credit Union Administration.

BancVue is the company behind Kasasa. Pioneer pays BancVue a fee to participate in the Kasasa brand. In return, Pioneer receives marketing materials, including a link on Kasasa's website.

A CNN Money story published last year quoted Gabe Krajicek, the chief executive officer of BancVue, as saying that by joining forces, seven banks in Ohio were able to make Kasasa the official sponsor of the Cleveland Cavaliers professional basketball team — "something one of the seven community banks would never have had the resources to do on its own."

About 150 community banks and credit unions in 39 states are now offering Kasasa-brand products, said spokeswoman Jacquelyn Daane. There are participating institutions in all of the states surrounding West Virginia. But Pioneer is currently the only participating financial institution in the Mountain State.

Bradley said Pioneer would welcome other participants. "The whole point is to get community institutions involved and get a bigger bang for the buck," she said. "But so far, even being the only institution, we're still seeing everything we've expected from this launch."

In addition to its headquarters at 1320 Kanawha Blvd. E., Pioneer has branches at 4802 MacCorkle Ave. in South Charleston, at Riverside High School in Belle, and at 1507 Main St. E. in Oak Hill. A branch near Sleepy Hollow Country Club in Teays Valley is under construction and expected to open in June.

Pioneer's Kasasa tie-up isn't the first time it has tried to showcase its member-oriented philosophy. In 2011, after Bank of America tried unsuccessfully to charge its customers a $5 monthly fee for debit cards, Pioneer ran an advertisement in the Sunday Gazette-Mail headlined, "Let's make change!"  Pioneer said it would pay its members 5 cents every time they used the credit union's debit card. The ad declared, "Finally checking that makes cents!"

Summit Community Bank, which has offices at Southridge and at 620 Virginia St. E., also has made news over the years. In 2002, when it was known as Capital State Bank, it began offering "Forever Free Checking."

Doug Mitchell, Summit's chief executive officer, said Summit has followed the evolution of BancVue's programs but decided to design its own product, branded Summit Advantage, which it launched four years ago.

The complexity of Kasasa offerings is sometimes difficult for customers to understand, Mitchell said.

"Some qualifiers are disingenuous, like when you say the customer has to do 12 transactions but in the small print it says PIN (personal identification number) transactions don't count. Some customers don't know the difference between PIN and signature transactions. So you have customers who come in who thought they did enough to qualify for a high rate but didn't."

Also, some institutions' monthly qualification cycle is different from their account statement cycle, which also can be confusing, he said.

Summit Advantage accounts are built on the same premise as Kasasa — "you sign up for e-statements," Mitchell said. "But we say three-point-of-sale transactions a month of any kind, PIN or signature, qualify you. Swipe your card three times to make purchases and you know you're good. And our statement cycle and qualification cycle are intentionally designed to be the same."

Bradley said there's nothing confusing about Pioneer's Kasasa-brand products.

It doesn't matter if the 12 monthly debit card swipes are PIN or signature transactions, she said. Pioneer's qualification cycle ends the day prior to its statement cycle, "so they can get that reward reflected on their statement," she said.

Contact writer George Hohmann at business@dailymail.com or 304-348-4836.


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