Top 10 Strategies for Driving Debit Growth

Greg Borchardt, Visa
April 15, 2010 | COMMENTS

Here are 10 ways to actively manage your debit card program and build stronger member relationships.

1. Benchmark your portfolio. Work with a portfolio consultant to determine your portfolio strengths and opportunities and compare your key PAU drivers (penetration, activation, and usage) to the average. Focus your resources on areas that are underperforming.
2. Quantify your portfolio opportunities. Leverage Visa Performance Measurement Calculators on Visa Online to quantify improvements in PAU. Even a slight increase in PAU can have a significant impact on your bottom line.
3. Evaluate and implement quick-win opportunities. If your portfolio is underpenetrated for example, consider upgrading an ATM card or DDA-only account to debit. Position the new card as a superior product to the ATM card and take this opportunity to thank members for their continued and loyal support of the credit union. Be sure to also share usage offers and/or information about your rewards program.
4. Focus on non-discretionary spend segment growth in 2010. Even in a challenging environment, most non-discretionary debit-spend segments experienced strong growth in 2009. Encourage usage in these segments which include supermarkets, quick-service restaurants, health care, bill payments, discount stores, and drug stores.
5. Utilize a marketing life-cycle approach to increase PAU. The Visa Debit Marketing Resource Guide is a free resource to help you develop and implement your debit marketing campaigns. Go to Visa Online to order a complimentary copy.
6. Reinforce the benefits of debit over cash and checks. Debit has many advantages over cash and checks for those who want to utilize ready funds during tough economic times. It's convenient, provides budgeting and spending control, and offers important consumer protections that cash and checks do not.
7. Incorporate best practices into every initiative. Visa has developed a number of best-practice guides to help you maximize your debit portfolio. All of these studies are available on Visa Online or through CSCU at no cost.
8. Focus on initiatives that build annuity-like usage. Offering a debit rewards program is a great way to encourage activation and usage, change cardholder behavior, and develop a competitive debit product. Promoting bill payments of monthly bills like telephone, cable TV, memberships, and utilities is another great way to build annuity-like usage.
9. Evaluate your authorization approval rate. Recent changes to Regulation E will affect issuers' ability to charge fees for overdrafts and will have impacts on debit transactions for both cardholders and issuers. Review your credit union's authorization approval rate to maximize portfolio profitability, while managing your risk.
10. Evaluate your online POS network strategy. Redundant online POS network participation can be expensive. Consider consolidation as a strategy to trim expenses.

Reprinted from the March 2010 newsletter of Card Services for Credit Unions.