Martha Rhine, Director at the Payments Consulting Network, met with DJ Seeterlin, Chief Innovation Strategy Officer and Kate Root, SVP/Managing Director at Chesapeake Bank to learn more about the bank, its product advances and partnerships that aim to provide technology solutions to customers. DJ was a panelist at TRANSACT 2023 in Atlanta last month.

Chesapeake Financial Shares Inc. (CFS: CPKF) is the parent organization of Chesapeake Bank, a community bank founded in 1900 and headquartered in Kilmarnock, Virginia. The merchant acquiring business is Chesapeake Payment Systems (CPS).

MR: Good Morning, DJ. At your ETA panel “What Are the Banks Saying About Embedded”, you shared your views on the evolving world we live in, and how you are actively playing a role in these changes. Can you share a little further on Chesapeake Bank’s innovative products and services, and the tangible benefits to your customers? 

DJ shared Chesapeake Bank’s role as a founding member of Alloy Labs Alliance, a consortium of approximately 80 innovative banks. A small group (10) of Alloy Labs banks worked together to build the CHUCK payments network. CHUCK was initially launched as an open-loop P2P capability that includes connections to Venmo. Consumers initiating payments through CHUCK can send them in real time or the next day. Payrailz, a provider of digital payment technology, enables the transfer of funds outside the CHUCK network using a variety of networks, such as debit networks, other P2P networks, and eventually The Clearing House’s Real Time Payments (RTP), and FedNow for faster payments. Chuck is designed to reside within a financial institution’s mobile and online banking applications. The sender enters the recipient’s phone number or email and details such as the amount and when to send. The recipient receives a message regarding the P2P and chooses where the money goes by simply linking a checking or debit account or digital wallet.

Alloy Labs Alliance bank members participating in the launch of CHUCK are Chesapeake Bank, American Bank, Citizens & Northern Bank, American State Bank, Citizens & Northern Bank, First Northern Bank, Five Star Bank, Mercantile Bank of Michigan, Reading Cooperative Bank, Savers Bank, and Union Bank. Reading Cooperative Bank in Massachusetts was the first to launch CHUCK.

In September 2022, Chesapeake Bank launched a second CHUCK product, Social Money at Finovate in New York. This product is the merchant virtual gift card program delivered through a P2P experience. Chesapeake Bank led the development of that product and was the first to launch the gift card option within its mobile banking application in April 2023 after testing the feature among its employees. DJ advised that Chesapeake Bank has been working to build more B2B payments use cases on the CHUCK network. DJ Seeterlin credits the bank’s flexible technology stack and technology partners Alloy Labs, Prizeout, and Q2 Holdings Inc for the successful launch.

Separately from their work with CHUCK, Chesapeake also designed, built, and launched a new Digital Debit Card service for Chesapeake Bank consumers. Launched in February 2023, the Digital Debit Card allows customers to create virtual Visa debit cards within their mobile and online banking application. The virtual card can be loaded into their mobile wallet for immediate use following an account opening or replacement of a card. And customers can have multiple cards that can be turned on/off independently for one-time or recurring payments. Consumers can view “how to” videos and FAQs on the bank’s website. The Digital Debit Card is the culmination of development work between Chesapeake Bank with Trabian, Q2, and Jack Henry.

All three of these products are built to be available to all banks.

MR: Thanks, DJ. Congratulations on your recent and significant product innovations for Chesapeake Bank and appreciate insights regarding your innovation and collaboration with business partners, internal stakeholders, and other consortium banks. May we pivot to Kate Root and Chesapeake Payment Systems (CPS) Merchant Acquiring business?

Kate Root is SVP and Managing Director for Chesapeake Payment Systems (CPS) in addition. Kate is active in ETA and chairs the banking committee. Her volunteerism also includes Association for Payments Professionals (APP).

Kate summarized the Chesapeake Payment Systems (CPS) Merchant Acquiring business at Chesapeake Bank as follows:

Merchant Services, now known as Chesapeake Payment Systems, was added as an option for businesses in 1997 when the bank wanted to expand its banking regional footprint. The bank partnered with FIS for a shared BIN relationship to offer merchant services. We started out providing equipment to businesses for electronic data capture and settlement of their credit and debit cards. This approach was right in line with the bank’s culture of meeting and fulfilling customer needs in an in-house manner. We further grew into an online processor with robust reporting and a team of friendly high-qualified support specialists.

Chesapeake now maintains direct relationships with TSYS and other processors. In addition to its principal membership with both Visa and Mastercard, Chesapeake maintains a direct acquiring relationship with Discover. In 2010, the acquiring program grew with Chesapeake Bank providing sponsorship opportunities for Independent Sales Organizations (ISOs) across the country and onboarding its first ISO.

CPS currently sponsors 8 ISO, 5 sales agents, 3 payment facilitators, 1 partner bank and still has its direct regional program. These programs support approximately 18,000 merchants across the United States.

Kate shared that Chesapeake offers customized solutions tailored to meet business needs. The recent development and launch of the bank acquiring sponsorship model for other mid-size, regional and community banks and your approach to partnership education built on trust, transparency, and collaboration underscores this.

Author: Martha Rhine, Director, Atlanta, Payments Consulting Network.

Martha has over 25 years of experience in the payments and financial services industries. She has worked with global payment and regional payment networks, processors, acquirers, ISOs, and issuers to execute compliance and release mandates and address non-compliance process changes and expense reduction measures thru training.

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DJ Seeterlin was one of the panelists for ‘What Are the Banks Saying About Embedded?’ session in Transact 2023 in Atlanta last month. ETA Transact is an annual trade show that brings together payments professionals from across the global payments and technology industries. ETA Transact is an annual trade show that brings together payments professionals from across the global payments and technology industries. TRANSACT Tech Toronto is happening on 14 June 2023. Check out their other upcoming events here.

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