Customer loyalty is one of, if not the most important things an organisation must consider when looking to expand. From start-up digital banks to major retail chains, retaining customers is of the utmost importance. One way of doing this is by creating an own brand payment card that acts as a symbol of status and should there be rewards attached to it, will create a positive experience for the consumer. But how does a company go about creating and maintaining one?
Kriya Patel, CEO, Transact Payments looks to tackle this question. With over 20 years of European banking experience encompassing savings, mortgages, Fintech, IT systems and most recently, and over the last 15+ years, eMoney, emerging payments and cards, Patel explains how a company would go about creating a payment card and how the use of partnerships can ensure its success:
A growing number of organisations, from start-up digital banks to major retail chains, are now offering their customers own-brand payment options. Whether these cards are simply for in-store use, or fully-fledged debit and credit cards co-branded by a payment scheme such as Visa or Mastercard, having their own-brand card has become something of a status symbol for brands in recent years.
The benefits of such card programmes are clear. Having your company brand on a card that a customer uses regularly boosts loyalty, especially if they get some kind of reward for using it. Depending on the services you offer, these cards could be simple charge cards for business customers, or full ATM-enabled debit or credit cards that users can keep in their physical wallets and on eWallets on their smartphone.
Furthermore, offering branded payment options gives businesses a better idea of how these customers are spending their money. This has an obvious benefit if you want to better understand customer behaviour in order to hone your products and services, especially if you want to create tailored, personalised experiences. These services will also boost loyalty and enable you to create effective rewards, putting you in a strong position to retain existing customers and to win new ones from your competitors.
How to get started
If your business hasn’t yet created an own-brand payment card scheme, then there are plenty of compelling reasons why you should do so. However, there are a number of things you will need to consider before you embark on this journey. For a start, you will need access to the relevant banking licences and membership of major payment schemes. Without this, you won’t be able to issue cards or have a Bank Identification Number (BIN) which is crucial if you want to facilitate payments.
You’ll also need to think carefully about the design of your card programme — not just what the card looks like, but how the whole programme will work. Things like the sign-up process, the kind of user benefits and rewards you will offer, and so on. As well as the necessary BIN and membership of the Visa and/or Mastercard scheme, you’ll need to get regulatory approval and ensure that everything you are doing complies with the relevant rules and laws. The payments ecosystem is a complicated, multi-layered pathway of organisations, each one reliant on one another to fulfil their role. You’ll need to know all about this and build the relevant relationships in order to successfully negotiate your way into this environment.
Once all of this is done, there’s the tricky issue of launching the programme and fixing any early-stage bugs. Ongoing, you’ll need to consider how the programme will be managed day-to-day, how transactions are processed and the all-important task of reporting. There are frequent regulatory updates to take into account, such as new technical requirement mandates involving PSD2 and 3D Secure 2.2, which require a new approach to security, fraud protection, alerting, and transparency. What’s more, you are going to have to achieve all of this in the most efficient and timely manner if you want to launch your own-brand card programme quickly. It’s likely that you won’t have the necessary expertise in house, so you may need to hire new blood. And there’s also the issue of keeping costs under control.
The benefits of partnerships
If all of this sounds like too much to take on, then you should be on the lookout for a reliable and trustworthy partner to do all of this for you. An experienced payments processor with the relevant experience, licences and relationships to handle all of this for you, while you concentrate on giving the customer the best possible experience. If you can outsource the time consuming, complicated behind-the-scenes work that is utterly necessary, you can concentrate on the exciting part — creating a market-leading customer experience.
Choosing the right partner is key if your business wants to develop a successful card programme and get it to market quickly. The partner will need to be able to offer you a licence that covers all of the territories that you wish to operate in, access to the right payment schemes, and the technical know-how to integrate an effective back-end solution into your existing system.
On top of this, you will need to ensure that your partner has a proven track record of delivering these services to other companies, and at the scale you require. But most important of all, your partner needs to have developed strong relationships within the payments ecosystem to give you the ability to expand and grow your card programme over time. Of all the decisions you make when you create your card programme, your choice of partner will be the most critical one — so make sure you get it right.