Debit card interchange income is one of the highest non-interest-oriented revenue streams for financial institutions. However, many institutions still don’t get the most out of their card programs. Insufficient benchmarking, sub-optimal interchange rates or too few transactions mean missed opportunities.
Maximizing interchange income can make a significant impact on your institution’s bottom line. The following steps will point you in the right direction. They will incentivize customer behavior, build customer relationships and increase revenue.
Measure What Matters
Clear measurements of customer behavior are needed to improve your institution’s interchange income performance. Effective benchmarking and the tracking of key performance indicators inform you of gaps to fill. A careful recording of the following can guide you to maximize interchange revenue:
- Penetration: the number of accounts eligible for cards compared to the number that have them. If there is a disparity between these two numbers, you should promote card use to a wider range of customers.
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