The Challenge
A leading financial institution in Central Europe, managing over 3 million cards and annual card sales exceeding EUR 10 billion, faced rising costs associated with its card portfolio. The need to reduce card fees while maintaining operational efficiency and improving business agreements with card payment networks was critical.
Intelica was engaged to provide a solution through its Card Brand Agreement Advisory service, focusing on minimizing card scheme fees by renegotiating terms with card networks to secure better pricing and long-term savings.
The Solution
Intelica’s Strategic Approach: A Two-Phase Advisory Process
Comprehensive Card Portfolio Analysis
6 weeks
Intelica conducted a six-week analysis of historical data, including invoices, operating certificates, past commercial scheme agreements, and seven-year portfolio projections. The goal was to improve the commercial terms of current agreements by addressing the following:
- Fee discounts
- Rebates for accomplishing volume targets
- Ratio of cash vs. value in kind incentives
Intelica’s detailed analysis allowed for the development of an optimized negotiation strategy to reduce costs and improve financial performance.
Advisory for Strategic Implementation
10 Weeks
Based on the findings, Intelica advised on the best course of action to approach card networks, guiding the institution through the final decision-making process. The strategic advisory led to substantial improvements in the agreement terms, enabling long-term cost reduction.
Intelica’s Card Brand Agreement Advisory delivered outstanding results, securing EUR 77 million in incremental profitability, representing a 289% improvement over the initial proposal of the winning scheme in the first round.
The institution’s scheme fee discount was increased to 115%, which included one-time migration support and minimizing scheme fees for long-term efficiency.
Key Outcomes
Incremental profitability
Improvement over the initial proposal of the winning scheme
Scheme fee discount, including migration support
Client Testimonial
Intelica’s advisory expertise allowed us to improve the commercial terms and minimize our card portfolio scheme fees. Their data-driven approach was invaluable to reshaping our financial strategy for the future.
