By Ben Mrva, SRM
Card Not Present: A High-Stakes Game
A Return to Normal, Without Returning to the Past?
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t’s no secret that the current rate environment makes it difficult for banks and other financial institutions to drive profitability. At the beginning of December, just 68 basis points separated the three-month interest rate (1.60%) and 30-year rate (2.28%). For comparison, in pre-Great Recessions days of 2005 when banks were flying high, the Net Interest Margin (NIM) was far more profitable due to wider spreads.
forward jolt in 2020. According to an e-commerce report in The Financial Brand from November 2020, consumers who did most of their monthly spending online (>50%) almost doubled from 24% to 47%. This shift in transaction type, which favors the Card Not Present (CNP) payment category, highlights the need to recalibrate revenue, risk, and cost strategies to an entirely different set of consumer habits.
Do you know which card your cardholders are defaulting to for Amazon, Instacart, or UberEats? Such default or top of digital wallet status will have significant implications on issuer revenue streams.
While some consumers may revert to previous behaviors after the pandemic, most of these shifts will have become second nature. Another example is “tap and go” at the physical point of sale. Payment networks have touted this capability for years in TV commercials, but it took COVID-19 to make the act of passing a piece of plastic back and
The ongoing migration from brick-and-mortar retail spending to e-commerce channels got a
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• May-June 2021
