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Visa Consulting & Analytics

November 2021


4 - 5 Minutes

Optimizing your debit business: Three steps to get the most from your portfolio

Debit sits at the heart of a customer’s relationship with their bank, giving issuers the opportunity to embed themselves into their customers’ spending lives and cross-sell further products. But changing regulations and the unexpected impact of COVID-19 means that issuers are under pressure to optimize their debit offers and reduce losses and increase profits.

Cutting costs by downgrading premium products, removing benefits, loyalty rewards and cobrand deals might seem like the easiest, fastest, and traditional way to deal with profit and loss pressure. However, just because they are quick and easy moves, doesn’t make them the right ones to make. In fact, they risk reducing customer engagement and satisfaction and increasing the likelihood of your cardholders turning to your competition in search of a better deal.

Instead, issuers need to widen their view of both debit profitability and optimization, so that you can add value to debit through proactive portfolio management across each stage of the debit lifecycle, focusing on prioritizing short term quick wins, followed with medium to long term strategies to maximize the return from investment.

So, how can you get the most out of your debit portfolio?

Getting the most from your debit portfolio is all about making the most of the customers you have and offering them what they really want and will use, rather than wasting time and money on unnecessary add-ons. Our white paper outlines a three-step approach Visa Consulting & Analytics has put together to help you optimize your portfolio while driving profitability and reducing losses:

Step One
Drive debit portfolio performance by leveraging Visa’s data driven initiatives to increase activation, accelerate usage and optimize authorization rates.

The idea here is to drive your debit portfolio performances by optimizing your existing portfolio. The following initiatives are quick wins that can be implemented in the short term for rapid mitigation with an incremental and lasting increase in payment volumes:

  • Increase activation – focusing on early customer engagement and dormancy reactivation with a solid Early Month on Book (EMOB) plan.
  • Accelerate usage – by driving existing customer spend through segmentation, cash displacement, digital engagement, cross border usage and merchant category expansion.
  • Authorization optimization – ensure you are minimizing declines without driving up fraud risk.

Step Two
Find cost efficiencies by revamping customer value propositions with benefits, features and loyalty programs.

Revamping the benefits, features and loyalty programs associated with your customer value propositions by:

  • Redesigning your card value proposition offering to find areas to optimize and rationalize, while creating a value proposition which really resonates with your cardholders and provides tangible benefits.
  • Evaluating your loyalty program structure to determine what is really engaging your customers so you can effectively optimize and rationalize.

Allowing you to find cost efficiencies that can be implemented in the short to medium term to drive payment volume and ensure continued customer engagement by providing the right benefits and rewards.

Step Three
Diversify revenues by introducing instalments, new fee structures, deferred debit and increasing credit penetration on the debit base.

Expanding your view of debit profitability means embracing diversification initiatives which can bring you lasting increases in payment volumes in the medium to long term:

  • Ensure that your acquisition strategy is strong so that you can get the most out of cross-selling opportunities and increase customer stickiness.
  • Embrace new revenue streams such as deferred debit so that you can turn these opportunities into revenues.

In this Opinion Paper, the Visa Consulting and Analytics Team explores how debit issuers can optimize their portfolios, while driving profitability and reducing losses.

For more insights please read our full opinion paper here. To find out how we can help you address any of the ideas discussed, please get in touch with our Visa Consulting and Analytics team.

All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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