Keys to a High Performing Debit Program

The Debit Program Landscape

There are significant differences in debit card program profitability across community banks and credit unions around the country. One common factor that ties to debit card profitability is how the card business is managed: when the card business is managed with a growth focus (typically within the retail, product or sales side of the organization), debit card performance improves. Too often the debit card business is managed with a reactive “keep the lights on” strategy where the focus is limited to an operations and risk management focus. In these situations the card business often significantly lags relevant benchmarks and industry growth rates. In other words, the debit card program just isn’t generating as much profit as would be expected.

When a debit card program is properly managed it should deliver the highest amount of non-interest deposit income for the financial institution. Why then do many FIs manage debit card from an operational perspective? The primary reason is that many community FI’s do not have a clear view of debit card contribution to the bottom line. This is often due to complex or even confusing revenue and expense reporting from networks and processors, lack of subject matter expertise within the FI, and overly generalized financial general ledger classifications within the FI.

Accordingly, debit card programs should be managed as a product, with a growth focus. High performing debit programs have certain attributes and key activities that drive revenue and profitability.

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