News

Mercator launches EFT/ATM processor review

December 19, 2006

BOSTON - Mercator Advisory Group has launched its review of EFT and ATM processors' offerings. The report, available to financial institutions, examines debit processing, cost differences between PIN-debit and signature-debit transactions, and the impact of rewards programs on issuers, merchants and consumers.

According to a news release, the report also examines how processors approach selling card processing, ATM services and driving, reporting and data mining, security and fraud management, and reward programs. The report also includes information about the role the ATM plays in bank operations and the prospects for deploying advanced ATM functions.

Highlights of the report include:

Debit-based rewards programs can positively impact cardholder activation by 14 percent or more; rewards programs also can increase monthly spend per card by 13 percent.
A well-managed program that uses both PIN and signature debit can improve per-card transaction volumes to 22.7, up from 10 for PIN only and 14.4 for signature only.
Rewards programs for PIN-debit and signature-debit transactions improve ROI.

"Processors are out ahead of their customers in at least two areas that impact cost and revenue: fraud management and debit-backed rewards programs," said George Peabody, research manager of Mercator Advisory Group's debit advisory service. "While debit-based rewards programs have enjoyed uneven uptake by bank customers, the numbers plainly show that these efforts are worthwhile both in terms of accountholder retention and profitability. They are not just a revenue-neutral exercise."