Card brand agreements between issuers and major payment networks like Visa, Mastercard, and American Express contain valuable incentives that, when optimized, can unlock substantial financial and operational benefits for issuers. Intelica Consulting focuses on helping these entities maximize these incentives, ensuring they align with long-term business goals and drive profitability.
Partnering with a card payment consulting firm like Intelica Consulting can make this process more effective and advantageous, especially when focusing on maximizing the incentives available through these agreements.
Minimizing Costs through Tailored Incentive Strategies
A key aspect of optimizing card brand agreements lies in refining the incentive structures to better align with the goals of issuers. Intelica works closely with these entities to evaluate the portfolio options they have in mind, assessing which configuration will yield the most optimal results.
Portfolio Evaluation
Issuers typically present several portfolio options, which involve the allocation of different card brands (such as Visa, Mastercard, etc.) across various products (consumer, commercial, credit, debit, etc.). This analysis focuses on identifying which combination of card brands minimizes costs, aligning with the transaction patterns of issuers.
Identify the Best Card Network Proposal
Card networks usually provide multiple proposals, including partial portfolio share versus portfolio exclusivity and longer versus shorter agreement periods (e.g., 10 years vs. 5 years). Intelica Consulting runs detailed analyses to calculate both direct and indirect fee costs, along with incentive revenues, to determine which proposal or combination of proposals will minimize overall card network fees.
Tailored Incentive Strategies
By tailoring incentive types to address the main cost pools, Intelica ensures that both direct and indirect costs are optimized. Indirect costs, in particular, can represent up to 30% of total card network fees. This strategic approach helps issuers optimize their agreements to reduce costs while maximizing the benefits of the incentive structures.
Adjusting Payment Methods and Frequency
Adjusting the method and frequency of incentive payments not only improves cash flow but also simplifies the process of payment monitoring, ensuring smoother financial operations for issuers.
Driving Operational Efficiency with Portfolio Optimization
Optimizing card brand agreements can lead to operational efficiencies, particularly when issuers consider consolidating under a single brand. This potential for simplification is often explored when reviewing different configurations.
Assessing Portfolio Consolidation
Evaluating the potential benefits of different portfolio configurations, including scenarios where consolidation under a single brand is an option, helps issuers understand the possible efficiency gains from such a decision. Intelica's leadership plays a crucial role in assessing these configurations to ensure the best outcomes.
Maximize Agreement Benefits with Ongoing Monitoring and Incentive Management
Monitoring the achievement of agreement goals and managing incentive payments are key to maximizing the benefits of your card payment consulting agreements. Many card issuers focus on the negotiation phase, but ongoing monitoring ensures that the agreed-upon benefits are fully realized. By leveraging third-party monitoring services, your team can concentrate on core business activities while ensuring all incentives are maximized.
Maximize Goal Achievement
Card networks define various goals, such as processed clearings, sales volume targets, and the number of cards migrated, during the contract negotiation process. Issuers must ensure they meet these targets within specific timeframes to secure the associated incentives. Intelica's mission and values emphasize this ongoing support and goal achievement.
Optimize Incentive Billing
Ensuring timely incentive payments and verifying the accuracy of incentive calculations are essential to maximizing the financial benefits of your agreements. Reliable monitoring ensures that agreement incentives are correctly billed and paid, safeguarding your organization’s financial goals.
How Intelica’s Card Brand Agreement Advisory Service Can Drive Success
Intelica Consulting’s Card Brand Agreement Advisory service is designed to help issuers maximize the value of their incentive agreements. Through a comprehensive review of both current agreements and new offers for the future, Intelica identifies opportunities for cost savings and efficiency improvements. This service includes:
In-Depth Agreement Analysis
We thoroughly analyze your current agreements and any new offers on the table, identifying opportunities to optimize incentives, reduce costs, and improve efficiency.
Strategic Negotiation Support
While issuers handle direct negotiations with card networks, Intelica provides the strategic advisory needed to ensure that the terms being negotiated align with long-term goals and transaction patterns.
Ongoing Support
Intelica provides continuous support to ensure that your agreements remain beneficial and that the incentives are regularly validated as your business needs evolve and market conditions change.
By leveraging Intelica's expertise in card brand agreements, issuers can unlock significant financial and operational benefits, driving long-term success in a competitive market.
Unlocking the Full Potential of Card Brand Agreements
Optimizing card brand agreements is a strategic imperative for issuers looking to enhance profitability and gain a competitive edge. By partnering with Intelica Consulting, issuers can unlock the full potential of these agreements, ensuring long-term success in a rapidly changing financial landscape.
For more information on how Intelica can help you achieve your goals, contact us directly to schedule a consultation.
