While card issuers prioritize broad product offerings or aggressive marketing, the truly best-in-class performance in the payments sector hinges on a commitment to speed and security in customer experience and operational choices.
The “Customer Metrics Define the Anatomy of Excellence for Card Issuing” data book, via PYMNTS Intelligence in collaboration with Visa DPS, is gleaned from a survey of 451 U.S.-based payment executives.
The data shows that customer lifetime value (CLTV) is a key indicator of excellence. Issuers achieving high CLTV, defined as generating more than $2,500 per cardholder over their total tenure, are twice as likely to report robust business performance compared to their counterparts.
This strong correlation — 44% for high-CLTV issuers versus 22% for low-CLTV issuers — underscores CLTV as a vital benchmark for strategies aimed at customer retention and reducing churn.
Beyond the headline findings, a deeper dive into the operational strategies of high-CLTV issuers reveals a clear emphasis on agility and protection:
- Speed in Digital Issuance: High-CLTV FinTechs, which prioritize speed, convenience and enhanced security, distinguish themselves through direct issuance strategies. Notably, 33% of these FinTechs are leveraging instant issuance to digital wallets, providing immediate utility and catering to tech-savvy customers.
- Analytics for Efficiency and Security: Two-thirds (67%) of all issuers recognize enhanced performance tracking and predictive analytics as defining features of a technologically advanced and best-in-class platform. These capabilities give rise to operational speed and efficiency and have the positive ripple effect of bolstering security through advanced fraud detection and risk management.
- Seamless and Secure Access: High-CLTV issuers are prioritizing innovations like flex credentials, with 10% indicating this as a key focus for the coming year. These credentials enable seamless access across various devices and shopping channels, contributing to both user convenience and the potential for dynamic security features.
High-CLTV issuers diversify their revenue streams, employing an average of 7.5 monetization strategies that extend beyond basic transaction fees to include late fees, co-branding fees and cross-border fees, among others. They also offer a broader portfolio of card features and types, which plays into the direct issuance noted above. Strategic partnerships are tailored to issuer type, with 62% of high-CLTV banks and credit unions prioritizing co-branding, while FinTechs focus on direct issuance.
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The customer experience is crucial no matter the product or services being offered, with 31% of issuers considering advanced customization options key to their platforms. User-centric design is also a priority for platform upgrades, favored by 20% of issuers, with 75% planning such enhancements within the next two years. The joint efforts are useful in overcoming limited customization options, a pain point for 34% of high-CLTV issuers and 31% of smaller FinTechs.
