Mobile Makes Headlines, But Plastic Makes Progress
Executives at card networks and issuers are concluding that tried-and-true marketing methods can still expand card acceptance in an increasingly digital world.
These methods include paper mailings, which are better targeted now that the people who prefer not to receive them are able to opt out in favor of email communication.
"Direct mail is still critical to us," said Kent Hattery, head of business development at First Bankcard. "We find it successful because data analytics can help us drill down the list. It is still costly, but you can engage your partner in helping with the list."
Hattery and other executives shared their experiences last week during SourceMedia's annual Card Forum and Expo in Chicago.
"We are seeing a renewed interest in cards," said Jeffrey Fincher, head of new business development and co-brand partnerships at Visa Inc. "Instant issuing and activation" of credit cards for a consumer at a retail location has been a popular service for Visa partners, Fincher added.
Once a new card has been activated, a retailer can attach mobile apps and other technologies to help a consumer order products that are not on a store's shelf, Fincher said.
Even something as modern as Apple Pay relies on the possession of a physical plastic card, which is typically required for enrollment.
"Right now it is very plastic dependent to take a picture and enter it, but we're going to have to figure out how to push it from our mobile applications," said Jason Tinurelli, U.S. Bank's senior vice president of retail payment solutions, digital strategy and innovation.
When banks are able to instantly issue card accounts into Apple Pay, "that will move the market for us," Tinurelli said. It will eventually be possible to move the product away from plastic, though banks will likely keep cheaper plastic cards in circulation for those who want them, he said.
Knowing payment cards are not going away any time soon, issuing banks can help retailers increase loyalty to specific cards by building in reward programs. More relevant offers and communications will always elevate card programs, said Tiffany Cheairs, director of sales operations at Alliance Data.
"We allow the data to drive us about how to engage with the consumer," Cheairs said. "It helps us understand a complete view of a customer."
As such, the communication channels that issuers and the networks establish with their partners are critical, and more thorough data breathes fresh life into basic channels like direct mail.
To make any communication channel effective, an issuer must share information about itself to its merchant partners, said Khary Scott, vice president of business development at Capital One.
"It is surprising how much information the merchant doesn't know about the issuer," he said. "We all have our secret sauce, but just sharing something like how losses in a partnership affect your business helps them better understand [the need for strong, long-term partnerships]."
A partnership in which the issuer and merchant are on the same page will help reach future consumers, particularly the growing millennial customer data base, said Hunter Woolley, vice president, co-brand business development, MasterCard.
MasterCard has been developing programs that emphasize life experiences rather than technology as a way to attract young adults to its products.
"You have to forget about the card for a moment and think about figuring out with your partners where their customers shop and live," Woolley said.
Daniel Wolfe contributed reporting to this story.