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Consumers with little to no credit history can be a profitable segment to credit card issuers if pursued correctly, according to Edmund Tribue, global practice leader for the risk management practice of MasterCard Advisors LLC. Tribue urges credit grantors to develop testing procedures to mine the underserved segment for credit-worthy and profitable customers. "As you are developing the test, you have to experience some losses," Tribue tells CardLine sister publication Collections & Credit Risk. "But you have to … capture information that will help you create those profiles of what a profitable, underbanked or underserved [consumer] will look like." Once this segment of the population is identified and offered prepaid cards or debit cards, for example, they can graduate to more mainstream products, he says, adding that this consumer with just a bit of a credit history now becomes a viable target for competitors. "You have to migrate them quickly into mainstream products with the right credit limit, the right APR, the right utility, or you are going to lose them to a competitor because now they're no longer the unbanked or underserved."

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