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Card Services: Turnkey Products Give
Smaller Banks a Foot in the Door

Learn how to boost margins and acquisitions with easy-to-implement,
state-of-the-art, customized payment cards.

Delivering Value interviews Harland Clarke’s Michelle Thornton, director of client products and programs

“If it ain’t broke, don’t fix it” is an oft-repeated adage. But even when business seems to be running at a steady hum, sometimes it is simply those missed opportunities that can take their toll in terms of lost revenue and reduced account acquisitions. Smaller institutions, in particular, may lack the resources and marketing muscle of national banks and, therefore, may pass on offering products that can significantly boost margins and acquisition rates.

“The answer is to consider offering turnkey products that give smaller banks a way to offer the innovative and tested products that huge banks take for granted,” says Michelle Thornton, director of client products and programs for Harland Clarke, which has been a pioneer in turnkey card payment solutions. These include payment options such as gift cards as well as customized debit and credit cards.

Visa Debit CardsFor community banks and credit unions without big infrastructure and access to cutting-edge technology, Harland Clarke’s card manufacturing and personalization services offer a way to ramp up revenue without sacrificing operating efficiency.

Debit cards in particular can have a significant effect on a bank’s bottom line. “It’s safe to say that for most institutions, increasing account holders’ debit card use by just three times a month can increase interchange income by at least 30 percent,” Thornton says.

The trick, she explains, is to make your account holders want to use your bank’s debit card before the four other cards that, on average, most people carry in their wallets. How do you do this? Just as the books you read, the music on your iPod and the décor of your home all reflect your identity, so, too, can a debit card reflect your individuality and style.

For example, cards with themes that reflect one’s environment—a desert scene for an Arizona bank or a snow-capped mountaintop for a New England credit union—are in high demand. Likewise, translucent and trendy foil-based cards are extremely popular.

Yet smaller institutions might hesitate to incorporate customized debit cards. “Some banks assume that custom cards are too expensive to produce,” says Thornton. No longer. “We have the resources to custom design and print, often for less than generic cards offered elsewhere.” These designs can appeal to a variety of demographic groups; one example would be to members of affinity programs, in which a percentage of card usage is donated to a particular organization, such as a university or charity—again driving higher usage.

What is your card potential?

The average debit card transaction growth for signature debit in 2006 was 20.3%.
2007 Debit Issuer Study: PULSE EFT Association

Small business spending (non-payroll) is forecast to grow to $5.7 trillion by 2010.
Visa USA 2006

The total number of contactless transactions should rise from about 777 million in 2006 to roughly 2.2 billion in 2010.
PRNewswire, May 2007

Photo cards are a great example. A long-time staple of large card issuers, photo cards are now affordable and easy for any financial institution to offer, regardless of size. “Banks like them because they reduce fraud and increase revenue and retention,” says Thornton, “so we made them doable from an operational standpoint.” Harland Clarke streamlined the procedure, providing banks with digital camera equipment, secure one-click online photo-capture technology and next-day turnaround. The entire process is digital, making the need to submit paper photos as obsolete as typewriters and rotary-dial phones.

For institutions wary of making the plunge into pre-paid cards, offering gift cards is an easy first step. “It’s a way to get your toe in the water,” is Thornton’s apt analogy, explaining that gift cards do not cost a lot. Harland Clarke’s Visa Gift Card program is a classic turnkey operation with virtually no bank overhead—included are the BIN, reporting and back-office work, chargeback processing and 24/7 customer support for card recipients. The bottom line is that gift cards draw traffic and keep customers from going to another bank that has them. “We also offer bulk ordering for your business accounts,” she notes.

Customizable card carriers provide even more bang for the buck. It is a perfect place to print marketing information, such as targeted cross-sell messages for other products and services.

What does the future hold? Thornton thinks that contactless cards, which are read via radio frequency signal instead of being swiped, will be the next big thing. “There are 20 million of them out there,” she says. “And 45,000 merchants already accept them.” The goal is to capture the micropayments market—cash payments less than $20 at places like fast food restaurants, convenience stores or chain pharmacies. “Merchants like contactless cards because it speeds up transactions and reduces opportunities for employee theft,” Thornton explains. Likewise, she sees technology eventually enabling customers to pay for purchases via cell phone or contactless key fobs, which would especially appeal to the 25- to 35-year-old market.

Looking ahead, when will contactless payments become as routine as magnetic stripe cards are today? Even Thornton won’t venture a guess. “That’s the $64,000 question!” she says.

For more information on how to offer these products to your account holders,
contact us at 1-800-277-7637 or