Gift Cards:
The Battle Between FIs and Merchants
NPR Marketplace Money:
Banks Want
You!
Creating a Dashboard for Payment Acceptance
Small Business Payment Study: The Results are Almost Here!
Happy Holidays from Dove Consulting
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Issue #17
‘Tis the season for giving, and this year, more and more consumers will be giving their loved ones a gift of the recipient’s own choosing. Prepaid cards remain a hot topic in 2006, and gift cards have become a holiday staple in many households. If you believe a recent Lowe’s Home Improvement commercial, even Santa now shops at gift card malls!
But the question this year is will Santa’s sleigh be filled with retailers’ store-branded gift cards, or with the ‘use anywhere’ gift cards now offered by many financial institutions?
This issue of On Payments explores the market for gift cards, and discusses the outlook for closed loop cards and open loop gift cards.
To sign up for an online subscription to On Payments, please click here.
Gift Cards:
The Battle Between FIs and Merchants
With the holiday season in full swing, many of us are thinking about gift ideas for friends and loved ones. When doing our shopping, we all look for gifts that will be well received—gifts that are meaningful and will be enjoyed by the receiver—but are also convenient to purchase. Gift cards meet both criteria: they are flexible and easy to purchase, and they ensure that the receiver will have a gift they will like. Due to their mass appeal, gift cards have become a holiday staple, and 2006 looks to be another banner year for gift card sales.
In the midst of this gift card boom, there is a battle brewing between merchants, who issue store-branded (closed loop) gift cards, and financial institutions, who issue network-branded (open loop) gift cards. Although both types of gift cards fulfill similar purposes, there are distinct differences between the two models, and these differences have a significant impact on the dynamics of the market and the outlook for future growth.
Some analyst are projecting that financial institutions’ network-branded cards will eclipse the incumbent store-branded cards, given the greater utility (acceptance) of open-loop cards. It is our belief, however, that while there is room in the market for both gift card models, store-branded cards will remain the dominant gift card vehicle for the foreseeable future.
Click here to read the full article.
| Happy Holidays from Dove Consulting Wishing you a joyful holiday season and a healthy and prosperous 2007, from all of us at Dove Consulting |
NPR Marketplace Money:
Banks Want You!
In today’s competitive environment, banks continue to up the ante in an effort to retain their customers and to acquire new ones. On November 12, Rich Westelman spoke with Lisa Napoli of NPR’s Marketplace Money about the strategies banks are using to attract customers and to keep their business. Click here to listen to the segment or read a transcript of the story.
Creating a Dashboard for Payment Acceptance
There is so much new technology in and around payments that many companies are now looking at how they should organize around payments to leverage new processes and technologies.
One of the ways that Dove helps clients is by creating a Payments Dashboard, a two-dimensional array of payment channels by payments types. Populating this matrix with payment volumes creates a holistic view of their enterprise payments operation. Since each channel and payment type has a cost associated with it, it is easy to see where the cost savings opportunities lie. Therefore, when embarking on initiatives to move payments to cheaper channels and cheaper payment types, the results are easily visible.
One of the state automobile associations recently contracted with Dove to look at their Payment Acceptance process, as well as their remittance, collections, and call center operations. Click here to learn more about the work that Dove is doing to optimize their payment acceptance process, as well as their remittance operations.
Small Business Payment Study: The Results are Almost Here!
We are excited to announce the pending release of our newest research report, the Small Business Payment Study. Based on a national sample of small businesses, the study examines how small businesses make and receive payments, and explores the unique needs of this segment. The analysis is well underway, so be on the look out for the results early in the new year.
For more information about the Small Business Payment Study, please contact Laura Fuller at lfuller@doveconsulting.com or 617-753-9275.