Our blog is dedicated to sharing our thoughts and expertise about the banking industry and how you can experience quantifiable results for your financial institution. We invite you to hear the perspectives from our banking professionals through our posts.
Twenty years ago, when cash was still a primary payment method, surcharge-free ATM access was an important competitive tool for smaller FIs including community banks and credit unions. Consumers were generally using cash for most small ticket purchases, sensitive to ATM-related fees and often chose their banking relationship based upon this kind of access. But times have certainly changed! Fast forward to current day, and the importance of ATM access has declined substantially. There has been a steep decline in the number of ATM cash withdrawals in recent years and in cash share of consumer payments with the rise of mobile payments, online shopping, cash back at point of sale and the increased use of debit and credit cards. Consumers have reduced need and desire to pay with cash, which means the surcharge-free offering may no longer be strictly necessary to attract and retain them.
Mike Holt, PRI partner, discusses interchange income and how it’s calculated in this week’s blog. The History of Interchange Income Simply put, interchange is the small percentage of each credit card and debit card purchase amount that is paid to financial institutions by merchants for the privilege and convenience of accepting payments via the FI-issued […]
Debit card interchange income is the top contributor to deposit-based non-interest income for most banks, and if it’s not for yours – you must ask why! Two factors make debit card interchange income a smart thing on which to focus growth efforts. First, interchange fees are not paid by your customers (see “What is Interchange […]
In this blog, Phil Jarrell, debit card services expert at PRI, examines the new rule and how it may affect FIs. Jarrell said the key lies in whether the issuer’s network supports PINless transactions. ______________________ Thanks to the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal Reserve has required […]
Currently Financial Institutions are experiencing increasing pressure on non-interest income. Forward-looking FIs are investing in maximizing their debit card interchange income to push back against these pressures and promote institutional growth. In PRI’s blog, Maximizing PIN Debit Card Interchange, we took a deep dive into the differences in PIN networks and how they affect a […]
In the rapidly shrinking banking industry, financial institution CEOs often ask what they should be looking out for to maintain or improve profitability during a merger or acquisition. PRI knows acquiring banks should keep an open mind when evaluating the acquisition target’s debit card profitability and learn what is working well for them, and why. […]
While it is vital to pay attention to payment trends in the community bank space, an FI would be foolish to focus on trends over building a solid foundation for its debit card program. The debit card program, which should be handled as a product, holds the key to greater profitability and long-term growth and […]
No aspect of the financial ecosystem is more dynamic than the payments space. FIs who choose to continue doing what they have always done without closely examining their needs and desired strategy will find themselves in a poor competitive position. “While community bankers are necessarily dependent upon their vendor relationships to deliver services to their […]
The income potential of improving debit card portfolio performance – commonly referred to by insiders as PAU (Penetration, Activation, Utilization) – should place it at the forefront of most FI retail initiatives in 2021. In the last of this three-part series, PRI Partner Mike Holt examines best practices for growing a card portfolio through utilization. […]
In last month’s blog, PRI’s Mike Holt, discussed how increasing debit card penetration into accounts improves FI profitability. Now we will take a closer look at the second element of an FI’s PAU – debit card activation. Activation is measured as the percentage of open debit cards with at least one point-of-sale (POS) purchase over […]
