Interchange revenue has become a critical driver of profitability for banks, yet many financial institutions struggle to tap into its full potential. Traditional models often limit revenue opportunities, growth and control in credit card programs. CorServ’s innovative Commercial Card Issuing Solution is designed to empower financial institutions, helping them take charge of their programs, streamline operations, and unlock higher interchange revenue—all without the need for additional staff or infrastructure.
Unlike the Agent Bank model, where the lion’s share of this income is retained by the issuing bank, CorServ’s solutions allow community financial institutions to own the entire interchange revenue, unlocking a higher Return on Assets (ROA). By simplifying compliance, risk management, and servicing through a shared issuing bank model, CorServ allows financial institutions to focus on what they do best: serving customers and driving growth.
The Challenge for Community Banks
Building an in-house card issuing program is resource-intensive and cost-prohibitive. While the Agent Bank model offers simplicity, it comes with significant drawbacks:
- Limited access to cardholder data: Banks lack full visibility into detailed customer behavior, limiting their ability to optimize services.
- No control over credit decisioning: The inability to tailor credit decisioning that accounts for deep relationships.
- Reduced Revenue Share: Interchange, interest, and fees are largely retained by the issuing bank, resulting in lower profitability.
- Diminished Customer Loyalty: Relying on other parties for decisioning and servicing can distance financial institutions from their customers.
- Lacking functionality to compete with large issuers, such as automated rebates, virtual cards, and integrated expense reporting.
CorServ’s Turnkey Commercial Card Issuing Program
CorServ offers a comprehensive, turnkey solution that addresses all these challenges. Tailored to meet the community-oriented needs of financial institutions, CorServ’s Commercial Card Issuing Program is a ready-to-use platform that simplifies operations, maximizes revenue, and accelerates time to market. Key features and benefits include:
- Interchange Revenue Ownership: Banks retain 100% of interchange, interest and fee income, leading to a significantly higher ROA compared to the traditional Agent Bank model.
- Shared Issuing Bank Support: Simplifies compliance, network sponsorship and servicing, enabling banks to focus on customer engagement and growth without operational headaches.
- Modern Technology: Cloud-hosted API-driven technology with modern interfaces, advanced capabilities, and new releases about every 8 weeks to address market needs.
- Key functionality to increase purchase volume and interchange such as virtual cards to pay vendors, integrated expense reporting, and custom automated rebates by company.
- Efficient Operations: Leverage complete program management including modern underwriting platform, automated rebates and extensive support for bank employees across functions.
- Transparent Program Data: Access detailed insights into cardholder activity, revenue streams, and program performance to identify opportunities for growth and optimization.
- Rapid Market Entry: Launch your card program quickly and efficiently without the need for expensive infrastructure or hiring additional staff.
Maximizing interchange revenue is key to long-term success in the card issuing business. CorServ’s Commercial Card issuing solution enables financial institutions to overcome traditional barriers, unlock their revenue potential, and offer modern, scalable card programs. Calculating interchange to the transaction level, accounting for lower interchange on large ticket items or certain merchants, and detailed reporting by company including interchange and Level 2 and Level 3 transaction data enables our bank clients to maximize interchange and manage a profitable and competitive credit card program.
Whether you’re implementing a new card program or optimizing an existing one, CorServ’s expert team provides end-to-end support, ensuring a smooth experience from implementation to ongoing management.
Elevate your commercial card issuing strategy and don’t let traditional models limit your potential. Contact CorServ today to learn how we can help you maximize interchange revenue and drive your success.
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