How to get creative with cards

Plastic cards remain popular even as digital payments grow. Here’s how you can make your community bank’s card program stand out from the crowd.

By Phil Britt

With the rise of Apple Pay, other forms of digital payments like Venmo and Zelle, and even metal credit cards (Amazon Prime’s card and American Express Platinum, among others), the humble plastic payment card is surrounded by competitors.

But don’t count it out yet. Plastic cards provide an entry point for community banks into the still small, but growing, digital payments arena for Apple Pay, Samsung Pay and similar digital payment programs, along with e-commerce giant Amazon. Each allows customers to select their preferred card for payments.
“The way we pay for things has changed,” says Patrick Dix, vice president of public relations for Shazam. “But have we evolved beyond the point of plastic cards? I don’t think so. Cards are going to be here for the foreseeable future.”

Plastic cards, particularly debit cards, can still provide income for community banks. “Our card program provides a meaningful revenue stream,” says James Mensching, president of $517 million-asset Itasca Bank & Trust Co. in Itasca, Ill. “We’re making money on our debit card program each month.”

To ensure a successful card program, community banks need to market the right type of card to the right audience. Dix says baby boomers and Generation X customers tend to prefer credit cards, while millennials prefer debit card programs. “[Millennials] tend to want to spend only what they have.”

But getting customers to sign up for a card isn’t enough. The goal is to keep them using it. And that involves thinking creatively about what a card program could look like.

Goals first
The first step is to determine what your goals are for your card program, says Dix. “The goal may be to drive additional revenue … customer retention or some combination thereof.”

If the primary goal is revenue, you may want to use a rewards program to encourage customers to use their cards for frequent purchases, such as gasoline. Other community banks introduce rewards to promote charitable giving or to encourage them to make purchases with designated local merchants, such as through the Buzz Points program.

If the goal is customer retention, you’ll want to promote card sign-up, authorization and use. The idea is that the more products and services customers have with your bank, the less likely they’ll be to leave for another financial services provider.

Any rewards must be structured in a way that drives additional profits to the bank, rather than having the cost of the rewards exceed the benefits. Dix points out that some debit card networks offer little in the way of benefits but have high expenses.

“Expenses have been going up on certain kinds of transactions and are eroding profitabililty for banks,” he says. Newer card features, such as tokens and biometrics, carry additional fees with no monetary benefits for banks.

Banks benefit most from frequent card usage, says Trent Fleming, an independent community bank consultant. “You have to make sure that you are promoting the card and its benefits,” he says.

“Many community banks offer different kinds of cards besides debit cards that customers might not know about.”

Fleming adds that customers appreciate thoughtful promotions, such as partnerships with local merchants and contests. Contests can be simple; for example, you could run one where, for every 15 card transactions the customer makes, they’re entered into a drawing for a small prize like a gift card.

Custom card designs, with images specific to each cardholder, can also promote usage. “These types of cards tend to enjoy top-of-wallet status, particularly when designed or personalized by customers themselves,” says Jason Bohrer, SVP and general manager, Secure Card Solutions, at CPI Card Group.

Metal cards are another option to consider. It’s more expensive to manufacture them, but Bohrer says banks still stand to benefit. “Premier membership programs typically attached to metal cards attract high-value cardholders that can have a greater business impact relative to the average cardholder,” he explains. “Furthermore, the metal card provider’s manufacturing capabilities and techniques can lend to lower costs for the issuer.

“At CPI, for example, we are employing fusions of metal and PVC to create cards that provide the same metal-card feeling at a lower cost than all-metal cards.”

Another offering popular among customers is instant issuance, where the bank creates the card while the customer waits, rather than making them wait a week or two while the card is made offsite and then mailed to them. The customer can start using the card immediately, meaning it generates revenue for the bank from day one.

The bottom line? Community banks can’t discount the growing potential of digital payments. But with a thoughtful strategy and innovative approaches to rewards and card aesthetics, you can ensure that cards continue to play an important part in your community bank’s suite of products for years to come.


Phil Britt is a writer in Illinois.

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