Why It’s Time To Focus On Card On File

by Sarah Grotta 0

CUToday featured an article regarding Card On File (CoF) tactics for credit unions that also has application for banks:


Brian Scott, SVP of sales and solutions consulting at PSCU, told CUToday.info he noticed the trend both in holiday spending data and in data around the start of 2017, saying the credit interchange decline illustrates how more transactions are moving to card on file as consumers use popular store apps, like those offered by Amazon and Costco. Scott recommends that credit unions spend money now to ensure they don’t get cut out of this space by competitors’ cards.

This simply speaks to people’s spending habits,” said Scott. “Amazon and Costco, for example, have made huge inroads into people’s spending, as has Walmart. Amazon and Costco have deals for lower credit card rates with Visa and Mastercard, so as this spend shifts toward these stores, credit card interchange goes down.”

What this trend also speaks to, insisted Scott, is the importance of credit union issuers playing more heavily in the card on file space with the increasingly popular store payment apps.


The CoF with a specific store app or a payment app tends to stay there. So getting your card there first, matters. Some suggestions were made on how to influence consumers CoF decisions:


This is one of those times when paying for playing in this space is effective,” said Scott, who is encouraging credit unions to begin devising card on file strategies before many others do the same. “Pay to get your card in, and once it’s there, it’s really sticky. This is a situation where a large incentive is valuable.”

Scott suggested that the credit union, if it offers points, award bonus points for members’ first two transactions within popular store apps, or a higher cash back percentage.

“Or maybe you pay $5 for each of the first two transactions. That may seem outrageous, but it ensures you get your card in the app, and then you have a high level of assurance that it stays there,” said Scott, adding that the credit union’s upfront investment is small compared to the return.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

Read the full story here

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