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.
