The changing co-branded credit card landscape
David Boone, TD Bank: The card partnership space is vastly different from what it was ten years ago!
As retailers across the country need to bring innovative customisation and convenience factors to their customers, credit cards are becoming an essential part of delivering value. Co-branded cards continue to play an important role in the retail landscape and can offer a unique point of distinction for retailers in today’s competitive environment.
As customers evolve, so has the landscape for co-branded cards. There have been a few major technology trends impacting today’s retailers:
- Shift in the bank-retailer relationship
In the past, banks had a standard partnership agreement that they offered to their retail partners. However, this one-size-fits-all model doesn’t work in today’s marketplace. Now, banks have to offer a customisable set of solutions that meet each retailer’s needs.
A flexible model allows retailers to deliver a differentiated customer experience and drive revenues.
In March of 2013, TD acquired ownership of the Target Credit Card portfolio. Under the deal, Target retained the servicing of the portfolio, allowing for continued integration into the Target guest retail experience. The service retained approach caused minimal disruption to the Target guest.
- Omnichannel capabilities
The operational flexibility now offered by banks allows retailers to implement new payments technology that’s appropriate and most compelling for their customers. This includes serving a market of customers who is largely moving to mobile and online platforms.
Retailers should consider a bank’s omnichannel capabilities and how its offerings allow it to compete in the space.
Adaptive technology and mobile capabilities for payments with co-branded cards is essential for navigating this changing landscape.
- Big data
In addition to modifying the way transactions are processed, new payments systems allow retailers to gather rich data about their consumers’ habits. The right card partnership should provide a better understanding of the consumer and drive the creation of optimized solutions. This means leveraging a bank partner’s capabilities to create business and communications strategies.
With these emerging trends in mind, retailers should seek a bank partner with the ability to deploy marketing solutions. The bank’s ability to communicate with the customer on the retailer’s behalf through cardholder touchpoints is an important element for success. This includes emails, servicing, direct mail offers and even building customer loyalty programmes.
The card partnership space is vastly different from what it was ten years ago. For today’s retailers, it’s important to seek out a bank partner who is engaged in the value chain, flexible and offers sophisticated solutions. Together, there should be a long-term view of the business and a commitment to its overall success.
David Boone, EVP, head of US partnership, TD Bank
