Issuers To Prioritize Debit Cards, Tech Spending
US banks plan to invest in debit product lines and technology to grow their card operations, according to a survey by the American Bankers Association and strategy consulting firm, Edgar, Dunn & Company. Debit cards as a check-replacement tool are a priority for all banks, with 21 per cent of debit card issuing banks planning to issue stored-value cards in 2003, up from 8 per cent in 2002. The opportunities in next-generation debit cards are important, but growth in traditional POS debit use is expected to continue, with small issuers achieving a 51 per cent penetration in 2003, and large issuers, a 72 per cent penetration.This compares to a 46 per cent debit card penetration for small issuers in 2002, and 69 per cent, for large issuers, whereas the penetration of POS debit cards issued by mid-sized banks is expected to reach 67 per cent in 2003, up from 61 per cent in 2002. Sixty-three per cent of large debit card issuers see card-based person-to-person payments as a market opportunity in 2003. Technology investment is a priority for credit card issuers, which rank software automation and fraud prevention and detection as their top two technology investments, while also planning EBPP, Internet and recurring payments services.
EBPP technology spending ranked third on the priority list at small to mid-sized banks in the survey, with large issuers listing customer-relationship management (CRM) capabilities ahead of EBPP solutions. In the next five years, consumer credit card products, EBPP services, Internet and recurring payments will similarly be a priority for US issuers of all sizes. With regard to loyalty programs, 25 per cent of large issuers with loyalty programs plan to expand their program in a move that underscores the importance of loyalty points to their business, as do 50 per cent of small issuers and 57 per cent of mid-sized issuers. Related Links:
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