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Bob Koehler

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Adapting to Impacts of COVID-19 in Your Card Branding Agreements

Posted by Bob Koehler on May 10, 2020 9:00:00 AM

Adapting to Impacts of COVID-19 in Your Card Branding Agreements

It had long been predicted that the next U.S. economic downturn would be far less severe than the one triggered by the 2008 financial crisis. What wasn’t predicted, however, was the emergence of another “black swan” event like a coronavirus pandemic. Although the underlying fundamentals remain quite different, banks and credit unions everywhere should consider a few lessons learned from 2009-11 while they adapt their institution’s business model to the new norms of consumer behavior.  

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Topics: COVID-19, Card Branding Agreements

What a Decade’s Difference Means to Your Card Branding Agreements

Posted by Bob Koehler on Apr 26, 2020 9:00:00 AM

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Card-issuing institutions of all stripes (yes, a payments pun) are in store for some interesting times. According to SRM’s findings, a disproportionate number of card branding agreements are coming up for renewal over the next 12-18 months. Why is this important? Consider the timing.  These contracts, commonly signed with MasterCard and/or Visa, tend to be long term in nature and govern a large and growing share of non-interest income. As SRM witnessed during economic recovery from the 2008 financial crisis, properly realigning your bank or credit union’s critical card branding contract with the market, as well as other payments agreements, can uncover hundreds of thousands in both cost savings and revenue growth. 

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Topics: Debit and Credit, Card Not Present, Contactless, Card Branding

Low-Cost Deposits: Banking’s New Battleground

Posted by Bob Koehler on Jan 29, 2019 11:30:00 AM

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It’s fascinating how quickly economic tides can turn. For the past decade, banks and credit unions have been focused on lending—first in shoring up the quality of their portfolios, then in attracting new customers to prudently expand loan activity. With rates now on the rise and net interest margins widening, however, attention has shifted to attracting and retaining deposits.

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Topics: Vendors & Contracts

How Do You PAU? Optimizing Your Debit Card Program

Posted by Bob Koehler on Oct 31, 2018 10:00:00 AM

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Most bank and credit union leaders are familiar with ways to optimize their credit card programs, yet surprisingly few of them apply any transferrable techniques to their debit portfolios. Debit interchange is the first or second largest component of non-interest income for most financial institutions, so even nominal improvements can drive big benefits. Although credit card purchases generate more interchange on a per item basis, the reality for many smaller institutions is that they have more tools at their disposal to influence debit use.

The same PAU metrics (Penetration, Activation, Utilization) familiar to credit card program managers can be applied to debit. Let’s look at how these concepts can improve P&L:

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Topics: Vendors & Contracts

What You Lose By Negotiating Your Own Card Agreements

Posted by Bob Koehler on Feb 21, 2018 9:00:00 AM

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In a recent blog I noted that many financial institutions (FIs) continue to process debit transactions through four or more PIN networks, mainly due to inertia. There are numerous reasons to streamline this process — volume discounts, simplified back-office routines, reduced risk — none of which carry customer impact. Most networks no longer require their logos to be listed on the back of the card, so there’s not even a need to reissue plastic.

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Topics: Vendors & Contracts

Can You Swipe Me Now? – Choosing the Right PIN Network

Posted by Bob Koehler on Feb 6, 2018 9:00:00 AM

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Americans of a certain age recall the not-so-distant days when one had to check the logos (“bugs,” in banking parlance) on the back of their card to confirm it would work at a given ATM machine or retail terminal. For this reason, financial institutions (FIs) join multiple networks to ensure sufficient reach for customers, particularly those who traveled outside their home region. As a result, the multitude of bugs on the back of cards made them look like a NASCAR driver’s coveralls.

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Topics: Vendors & Contracts

Revenue-Enhancement Services: Why $8 Billion is the New $10 Billion

Posted by Bob Koehler on Sep 20, 2017 12:45:00 PM

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To say that some financial institutions (FIs) have an unhealthy obsession with the Durbin Amendment is not a stretch.  These FIs have been watching and waiting hopefully at a brief window of (probably unrealistic) hope that the new administration would repeal the amendment. The reality for all FIs, however, is that aside from some regulatory relief around the edges, there’s little reason to expect meaningful action on the regulatory front until after the 2018 mid-term elections.

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Topics: News

Revenue-Enhancement Services: Demystifying Debit Interchange

Posted by Bob Koehler on May 17, 2017 9:00:00 AM

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For nearly all banks and credit unions, debit interchange ranks alongside overdraft fees as one of the two leading sources of non-interest income, yet few financial institutions (FIs) have actually analyzed the underlying dynamics of their interchange programs.

Since debit interchange revenue has been on a solid, upward trend for decades – with one notable exception – it is possible that some banks and credit unions have decided to leave well enough alone and simply enjoy the ride. In the meantime, however, soaring consumer volumes have masked some less favorable changes in rates and product mix beneath the surface, and FIs that fail to actively manage their debit portfolios are likely leaving money on the table.

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Topics: Technology

Contract Management: Dealing with a Growing Number of Vendors

Posted by Bob Koehler on Apr 12, 2017 9:00:00 AM

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For years, the trend in the financial services sector has been toward consolidation as the total number of US financial institutions (FIs) has been on a steady and steep decline with the roster of supporting vendors following a similar (if less dramatic) trajectory. Most recently, however, we are starting to see the supplier pendulum swing in the opposite direction, providing more choice to FIs in their vendor selection process.

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Topics: Vendors & Contracts

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