By Jacqueline Chilton
This is one of a series of posts with highlights of the ATM, Debit & Prepaid Forum 2009 preconference workshops. You can find an index of posts from the conference here.
Successfully Navigating the Debit Payment Evolution provided food for thought for debit portfolio managers and was led by Tony Ficarra and Jeff Fazio of FIS. The session began by providing an understanding of how the economy has affected the usage of debit by consumers and opportunities with new target groups like the under banked.
The FIS workshop also provided a valuable reminder of debit portfolio imperatives:
- Penetration: increase the number of cards issued
- Activation: increase the percent that are activates
- Utilization: use incentives and strategies to increase consumer usage of the card
Many issuing and activation policies are more conservative these days than modern risk management techniques might require. Transaction risk monitoring and tools like POS denial at big risk merchants significantly reduce risk from Debit cards. For customers that are having trouble qualifying for a debit card, consider prepaid or debit for ATM use only.
To improve activation, it is possible to provide the consumer with instantly issued debit cards that are activated by the customer service representative in the branch as a new customer gets a new checking account (DDA). Putting hurdles between the customers and activation reduces the percent of the cards issued that will become active.
Utilization is primarily about loyalty and merchant relationships and FIS offers clients a loyalty platform with flexibility for a variety of rewards. One of the suggestions that stood out for maximizing revenues was developing a small business debit strategy. Segmenting small businesses from the consumer card portfolio allows the bank to manage risk for lending purposes. It also is another opportunity to offer a debit card. Businesses tend to have higher dollar volume and higher ticket sizes ($/transaction). These cards tend to bring higher revenues for the bank.
The Glenbrook team is comprised of talented professionals from all areas of the payments industry, including business management, marketing, technology, operations, risk management, and business analysis. They have held senior roles at central banks, international banks, card networks, merchants, fintech startups, payments processors, and more. Together, Glenbrook Partners has become known as the go-to source for problem-solving, insights, and learning. Our team of bright minds and critical thinkers is what makes it possible.
Through our education wing, we have educated over 35,000 payments professionals on topics ranging from B2B payments to digital currencies and policy and regulation. Our experienced consultants have helped organizations in 62 countries achieve their goals with strategy advisory, in-depth research, and more. In addition to supporting payment professionals, the Glenbrook team is a valuable resource on the top issues of the day, sharing their experience and insights with professionals eager to understand industry fundamentals and how they are evolving.