How Discover® Helps Credit Unions Serve Their Members Better with Superior Card Programs (Webinar Handouts)
 

How Discover® Helps Credit Unions Serve Their Members Better with Superior Card Programs (Webinar Handouts)

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Are your debit and credit card products competitive in today’s market? In this recorded webinar we uncover the reasons why more and more credit unions are choosing Discover as their credit and debit ...

Are your debit and credit card products competitive in today’s market? In this recorded webinar we uncover the reasons why more and more credit unions are choosing Discover as their credit and debit card solutions provider. You will learn about new growth opportunities for your card portfolio, what’s competitive in today’s market and how your credit union measures up. Learn more at http://www.nafcu.org/discover.

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How Discover® Helps Credit Unions Serve Their Members Better with Superior Card Programs (Webinar Handouts) How Discover® Helps Credit Unions Serve Their Members Better with Superior Card Programs (Webinar Handouts) Presentation Transcript

  • Refresh Your Credit Card Program with Discover® September 15, 2011©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 1
  • Agenda• Discover® Overview – Discover® Acceptance• Industry Payment Trends• Discover® Brand• Program Overview – Credit – Debit• Program Support and Benefits©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 2
  • Discover® Overview©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 3
  • Global Payments Provider • Growing issuance • Fast-growing PIN-based • Global brand known for business ATM/debit network with service, rewards, and • Comprehensive 4,500+ participating cardholder benefits payments solution financial institutions • In over 185 including credit, debit • All top national PIN countries/territories and prepaid debit retailers accept • Millions of premium • Highest acceptance PULSE2 consumer and corporate among top 100 • Over 650K ATMs and cardmembers merchants1 cash access locations many who travel to U.S • Targeting domestic acceptance parity with leading payments networks by end of 20101 STORES, Top100 retailers, 20072 Research conducted by PULSE sales dept3 DFS Internal Data, includes North America ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 4
  • Discover® Global Acceptance Model • Robust global acceptance network for credit, debit, and ATM through direct relationships and alliances • Domestic Point-of-Sale Acceptance at 97% of Visa/MC1 • Domestic ATM coverage at more than 350,000 locations • Global Acceptance Initiative – Global cash access at more than 780,000 ATMs – Coverage in over 80 countries1. Internal DFS Reporting ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 5
  • Payment Industry Trends©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 6
  • Members Value Your Payment Products the Most Overall 84% Credit Card 94% Debit 94% HELOC 92% CD 92% However, only Mortgage 92% 29% have a credit card Checking 89% through their Savings 87% credit union Car 83% Source: Javelin Strategy & Research, 05/10, CU n=1,247©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 7
  • How Members Use Their Cards Transactor – always / almost always pay the entire balance 52% 50% 48% 46% There has been a large shift 44% among CU 42% members from revolvers to 40% transactors, making this an 38% attractive, lower 36% risk portfolio. 10/09-12/09 11/09-01/10 12/09-02/10 01/10-03/10 02/10-04/10 CU: Average Non-CU: Average CU Non-CU Source: Millward Brown, Brand Tracking Study, 10/09-04/10, n=7,000©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 8
  • Application Motivators High Medium Low Source: Javelin Strategy & Research, 05/10, CU n=1,247©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 9
  • Audience Polling Question Does your credit union offer a rewards program on your credit card program? Yes No©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 10
  • Penetration of Rewards Cards©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute TNS, State of the Card Market Report, November 2010 11
  • Audience Polling Question What kind of rewards program does your credit union offer with your credit card program? (select all that apply) Cash Back Air Miles Bonus Points (Gift Certificates, Electronics, Merchandise Merchant Funded Discounts Rebates©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 12
  • Card Reward Preferences Trend and Forecast by Types of Credit Card Rewards (Among Rewards Cardholders) 2007 - 2012 66% 62% 63% 64% 61% 57% 45% 46% 42% 42% 41% 40% 24% 22% 23% 23% 24% 22% 21% 21% 23% 23% 16% 16% 10% 8% 9% 9% 8% 8% 2007 2008 2009 2010 2011 2012 Cash Back Air Miles Bonus Points Discounts Rebates TNS, Winning Rewards in a Cautious Market, December 2010©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 13
  • Credible and Trustworthy Brand Fit Credit Union Discover Visa MC Company that gives you a safe, secure feeling 70% 68% 66% 66% Leader in the financial services industry 57% 66% 64% 64% Card I trust 72% 74% 73% 73% A large, stable, reliable institution 72% 71% 71% 71% Provides a good value 67% 67% 64% 64% Best all around card 61% 61% 60% 60% Rewards customers for using the card 47% 65% 57% 58% Card is primary because it offers rewards (among primary 23% 75% 39% 45% cardholders of each brand) Credit Union card members are looking for credible, trustworthy financial services brands. Perceptions of Discover are aligned with Credit Union members.Source: State of the Card Market Report, 2010 - TNS Financial Services©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 14
  • Discover® Brand©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 15
  • The Discover® Brand – Known for Rewards 15% Best Rewards 15% Easiest to Earn Program in the Market and Redeem Rewards 10% 10% 9% 7% 3% 2%Page Source: Commissioned Millward Brown 4Q’ 10 Brand Tracking Survey, 4Q’ 10, N=3,362, respondents drawn from the general population ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 16
  • The Discover® Brand – Seen as Refreshing Unique Carefree Non-Traditional Different Independent 82% 75% 75% 70% 52% 52% 47% 31%28% 28% 21% 20% 20% 21% 12% 13% 8% 8% 8% 7%Page Source: Landor Brand Asset Valuation Study, April 2011. Survey respondents=general population ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 17
  • Program Overview- Credit and Debit©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 18
  • Discover® Comparable Consumer Credit Tiers MasterCard ® Discover ® VISA ® World Elite/World High Value Premium Plus Signature Preferred World Premium Signature Enhanced Rewards Rewards Standard Core Traditional©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 19
  • Discover® Debit Highly competitive interchange pricing and low fee structure produce better economics What’s In: What’s Out: All Fees: No Sponsorship Fees Published No Branding Fees Transparent No Quarterly Fees Correlate to monthly issuer invoice “All-In Program Fee,” based on transaction volume, is: “Pay-as-you-go” Netted out of issuer interchange on monthly invoice©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 20
  • Program Support and Benefits©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 21
  • Unique Enhancements Spend Analyzer Cash Over Discover Offers©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 22
  • Unique Enhancements Discover® Giving©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 23
  • Discover® Turnkey Marketing SupportTurn-key, customizable materials to create attractive integrated campaigns• Acquisition Programs• Usage Programs• Branch Communications• Educational Materials• Merchant Funded Offers• AMPs• Online Sales Training Tool©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 24
  • NAFCU Member Benefits• Reduced Issuer Set Up Fee from $15,000 to $1,000• Waived Issuer Processor Set Up Fee of $15,000• 100% Transaction Authorization• Higher Interchange Rates• Straightforward Fees and Billing• No Licensing or Membership Fees©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 25
  • Questions Kristi Lockhart Discover Financial Services 224-405-5939 kristilockhart@discover.com www.nafcu.org/discover©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute 26