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Two programs to test the merchant services waters

By Andrea Knotts Bona

During the past year significant enhancements have been made to merchant card programs that ICBA offers to member community banks. Through an alliance with ICBA Bancard and FIS in Jacksonville, Fla., community banks can strengthen their merchant relationships with a gift and loyalty card program, as well as a separate new merchant bank card processing referral program.

Gift and loyalty cards

The first ICBA Bancard-FIS merchant card program involves a closed-loop gift and loyalty card program offered in partnership with Valutec Card Solutions in Franklin, Tenn., an FIS closed-loop gift card division.

Consider the following regarding gift card and loyalty cards:

  • A single gift card purchase nets three trips (on average) to a store: one for the original purchase and two for redemption.
  • More than 50 percent of gift card recipients spend more than the card’s value.
  • Almost 16 percent of gift cards sold are never redeemed. Depending on state laws, that income can become pure profit for a merchant selling the cards.
  • Gift cards are preferred over paper gift certificates 10 to 1 and are less susceptible to fraud and loss than their paper counterparts.

Today, most community banks are looking for ways to better serve their merchant customers’ needs while also increasing revenue. ICBA Bancard’s partnership with the Valutec allows community banks to more easily help their merchant customers extend their reach with merchant-branded, closed-loop gift and loyalty card solutions. By using Valutec’s loyalty and gift card products, transaction processing, reporting and merchandising support, community banks have a turnkey option.

Merchant Program RundownThe FIS Merchant Agent Referral Program provides ICBA members with several services and features:

  • upfront payment on approvals,
  • monthly residual revenue
    streams,
  • zero fraud-payment liability,
  • custom conversion support,
  • a customized agent program,
  • easy program implementation,
  • dedicated service and support
    teams,
  • complete sales and marketing
    support,
  • Internet portal for reports and
    easy submission of referrals,
  • comprehensive Valutec gift card
    program, and
  • the ability to brand support
    material, including online and paper-based merchant statements, sales and marketing materials, application forms and merchant agreements.

Under the gift card and loyalty card program, community banks refer their merchants to Valutec and receive revenue from their merchants’ card sales. The program enables community bankers to offer merchant customers loyalty and gift cards that are easily and securely activated, redeemed and reloaded at the point of sale. In addition, it offers automated monthly funds reconciliation for multi-location merchants and multiple reporting options. Merchants also receive 24/7 support.

Other customized options are also available through the program, such as turnkey services for offering pre-designed gift cards and gift card-in-a-box programs.

Merchant services

Under the merchant bank card payment processing program with FIS, ICBA Bancard can provide a portfolio of services uniquely tailored to the needs of individual community banks. Those merchant services include innovative processing solutions and in-depth knowledge to help community banks minimize their costs and create efficiencies in their merchant payments business line.

When it comes to merchant services provided by community banks, one size does not fit all. A community bank in one region may have completely different merchant banking needs than a counterpart in a different region. For that reason, the ICBA Bancard and FIS merchant services program enables community banks the flexibility to choose the products and services that best fit their needs. The program allows community banks to choose their level of involvement with the program and the level of service they want to administer directly to their clients. It also offers community banks a risk-free revenue stream, including upfront payments for new accounts generated from referrals and a monthly residual revenue stream based on merchants’ bank card activity.

Many community banks also shy away from the payment liability of offering merchant bank card processing. For that reason, the ICBA Bancard and FIS merchant agent referral program is tailored to mitigate the hazards of hacking and fraud and to alleviate rising compliance risks.

“A problem for many community banks is keeping up with the regulatory changes and remaining compliant—the penalties are pretty severe,” says Len Authier, FIS senior product consultant. “With the Merchant Referral Program, FIS becomes responsible for regulatory compliance.”


Andrea Knotts Bona (andrea.bona@icba.org) is ICBA vice president of marketing.

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