3 Things You Should Ask Your Credit Card Processor
Ostensibly, the solutions many credit card processors offer financial institutions appear to be somewhat similar to each other. How do you narrow down the choices when choosing a credit card processor for your institution? Here are three questions to ask.
1. What is Your Fraud Solution?
Payment fraud is of increasing concern for financial institutions. A recent study conducted by Vantiv and Socratic Technologies revealed that nearly half (48%) of consumers have experienced some sort of card fraud,1 and research from the Aite Group revealed that nearly half of consumers said their identity theft experience caused them to switch to a different bank or credit union.2 Your cardholders trust you with their sensitive information. You need a credit card processor you can trust to help safeguard your institution and cardholders from fraud.
Since consumers use many different payment types, find out if the fraud detection system covers multiple payment sources including credit and debit cards, wire transfers, and mobile payments. Other features to look for include predictive fraud analytics, transaction based scoring, and the flexibility to fine-tune a fraud prevention solution to fit your individual institution’s specific needs.
Data protection requires a delicate balancing act between protecting cardholders without inconveniencing them. The best solutions consist of both professional fraud analysts and software that allows you to proactively manage fraud, while minimizing false positives.
2. What Kind of Analytics do you Have?
In a study from CGI on consumer demands for bank and credit unions, 91 percent of respondents believe it’s important to be known by their provider, yet 62 percent say their provider doesn’t know them.3 In addition to having information about your cardholders, you need it presented in a useful way.
When considering your options, find out the kind of data provided and how it will help you meet your goals. Does the solution identify targeted revenue opportunities? Does it include predictive analytics so you can plan for cardholders’ future needs? Does it provide visibility into how your card program is performing in comparison to others in the industry? A good analytics solution will provide insightful data that you can use to increase customer loyalty, decrease attrition, and encourage new account acquisition.
3. Do you Support Emerging Payment Types?
Consumers are increasingly seeking more flexibility and personalization in payment—and mobile payments and EMV chip cards support that preference. The extent to which your credit card processor supports emerging payment types will contribute to your institution’s success in attracting and retaining today’s digitally savvy customers.
According to a recent survey conducted by Vantiv and Socratic Technologies, two out of three mobile payment users believe that mobile is a safer way to pay.4 When evaluating a mobile solution, in addition to security features like tokenization and encryption, ask about the solution’s capabilities. Does it support mobile proximity payments and online payments via apps and mobile websites? Does it enable person-to-person payments to individuals and groups?
If consumers are not already thinking about the security of their payment cards, the introduction of EMV chip cards has definitely brought the issue to their attention. A recent survey by MasterCard revealed that consumer interest in chip cards is on the rise. About half of respondents said they would have a more favorable opinion of financial institutions that offered chip cards, and one in three said they would be likely to switch card issuers if not offered a chip card by their current issuer.5 Be sure to ask about card issuing for EMV cards to both existing and new cardholders.
The credit card processor you partner with can have a significant impact on the ability of your financial institution to meet the needs of your cardholders, both current and future. These three questions can open up a discussion to explore your options.
1 Consumer Survey – Vantiv and Socratic Technology (June 2015 & Jan 2016)
4 Consumer Survey – Vantiv and Socratic Technology (Feb 2016)