Can't Afford It? Use An ASP

No doubt you've seen the ads: Visa, it's everywhere you want to be or...for everything else there's MasterCard. Besides these TV commercials, there is an almost daily barrage of offers in the mail, many with enticing low-interest introductory rates. After the special low rate period is over a new rate - as high as 24% takes effect. Businesses that understand this principle are eager to capitalize on this opportunity. Southern States Cooperative (SSC) (Richmond, VA) is no exception to the rule. Member-owned SSC is a farmer co-op operating in 25 states. As one of the largest U.S. farmer cooperatives, SSC purchases, processes, and manufactures feed, seed, fertilizer, and fuel. It also sells farm, animal health, lawn, home, and garden supplies through 1,300 local dealers.

Line Of Credit Creates Long Checkout Lines
Previously, SSC offered its members a line of credit via a revolving account. Each store had to keep a paper list of items sold on credit - a very cumbersome process. Because the legacy method for issuing credit did not accommodate electronic transfers, the SSC store clerk would have to make a phone call to Statesman Financial Corp., an affiliate of SSC, to find out the customer's account status, which included the customer's credit limit, current balance, and any outstanding fees. After this lengthy process, which might entail a customer waiting at the checkout area for five to 10 minutes, the SSC clerk would have to mail the credit agency a slip, indicating how much money should be charged to the customer's account.

Audrey Henderson, manager of consumer finances at Statesman Financial Corp., recalls how inefficient the process was. "Customers were spending extra time waiting for credit approval, SSC clerks had a lot of paper work to do for each credit transaction, and we had a lot of paperwork to do on our end," recalls Henderson. "Besides causing headaches for all parties involved with the process, the system's manual setup made for a higher chance for errors." Henderson knew that the antiquated line of credit system the SSC was using couldn't compete with credit cards. There was no additional value for an SSC member to open a line of credit with the co-op versus using his/her credit card. SSC's dilemma was that it didn't have the resources to purchase and set up a credit card program.

Deploy A Credit Card Program ASAP
Statesman Financial Corp. began looking at new alternatives to the manual line of credit system it was currently using. The company was recommended to Fiserv (Lake Mary, FL). Fiserv, an ASP (application service provider), offered two processing solutions that would enable Statesman Financial Corp. to offer SSC members a true, automated credit card program. Because Fiserv hosted the software and hardware at its site, Statesman Financial Corp. did not need to incorporate any IT resources to deploy the new solution. The ASP would even handle creating and mailing the credit cards to SSC's members. All that Statesman Financial Corp. needed to completely upgrade its line of credit program were PCs and modems.

Another benefit with using an ASP-hosted credit solution was that the deployment time for the new system took a fraction of the time it would have taken for Statesman Financial Corp. to host it itself. What would have taken months to set up and implement, took only a few days.

SSC members now can make purchases with their SSC credit cards just as easily as they can with their major credit cards. And Statesman Financial Corp. is able to oversee 40,000 credit loans with only 10 agents. "We've gotten a lot of positive feedback from the program," says Henderson. "We've been approached by other regional co-ops that want to make the same upgrades to their credit programs."

Another benefit that Statesman Financial Corp. notes for using an ASP-hosted credit solution is that it doesn't have to worry about keeping up with all the changes in credit application laws. The ASP handles that, too.