Payment Industry Insider

Increasing the penetration rate - the percentage of debit card accounts compared to the total eligible checking account base - can boost your portfolio performance more significantly than you may realize. A slight increase in your penetration rate can have a substantial impact on your sales volume and interchange income.

If your penetration rate is lower than the industry average of 70-75%, you have an opportunity to concentrate on the penetration life cycle to start achieving long-term growth. If you’re surpassing the industry average then you may want to shift your focus to activation.

Focus your marketing efforts into three key areas:

A. Plan - Identify your target audience by segmenting your members. It is important to know who you want to reach. Break your market down into three different groups to increase the effectiveness of your campaigns.

1. New members at account opening
2. Current members who use an ATM card to get cash and make PIN purchases
3. Current members who don’t have an ATM or debit card

B. Implement - Implement your strategies to boost your penetration. This is where you determine the most cost effective tactics to reach your members.

1. Educate your employees and members about the benefits of a debit card
2. Utilize employees as a channel to promote and encourage debit card usage
3. Use merchant incentives to promote account penetration
4. Promote rewards as an incentive to obtain and use their debit card
5. Upgrade all of your ATM cards to a debit card
6. Utilize direct mail material to promote debit cards

C. Measure - Always evaluate your results.

1. Track and monitor your penetration rate on a quarterly basis to ensure appropriate adjustments are made
2. Compare your penetration rate over time to that of your peer group and industry average
3. Quantify your results to evaluate the impact of your marketing programs.

Although this may sound simple, you may be amazed at how many financial institutions do not have a solid marketing campaign in place. It’s time we focused on debit cards - share your success stories with any debit card promotions by clicking on the comment link below.

Stay tuned for next week, as I will talk about activation strategies for your debit card program.