Card Control Version 2.0

By Robb Gaynor

Debit cards are becoming the marketers’ next big thing.

Great marketers look for differentiation—it is the lifeblood of great marketing. Debit cards—more specifically mobile debit card controls—are becoming the next big differentiator for astute deposit and checking account marketers.

The window of opportunity to be different using mobile debit card controls will be small, as right now less than 7% of the banks and credit unions over $100 million in assets offer debit card controls. So if you have them, you are different, and you should be marketing the heck out them. Customers like “card controls.” When they are offered, approximately 17% of active mobile banking customers use debit card controls every month (based on Sept. 2016 data from 200+ financial institutions).  Finally, a way to differentiate a checking account.

What is mobile debit card control?

It’s a feature of mobile banking that has been around for about four years. It provides customers with the ability to control the debit card linked to their checking account. Mobile banking customers can turn their debit card on and off in real-time. They can get instant approval on an ATM limit increase or an increase to spend more money on the card at a local merchant, like for buying a TV or furniture. The customer can also limit where the card is used, so certain merchants can be blocked (gas station versus department store versus movie theater). Customers can set card controls by geography, setting a geo-fence or a specific geographic area where the card can be used.

Debit card control puts the power in the hands of the customer. It is a natural extension of the overall use of the debit card as a very popular way of making payments. In recent months, Discover Card has pushed out a national advertising campaign that has raised the visibility of card controls. This is good news. Finally the topic is getting some attention, and marketers can now use it to their advantage—differentiation!

How does a bank launch card controls and get into the game?

By launching a mobile app. There are three ways to launch a mobile app with card controls:

  1. As part of the mobile banking solution
  2. As a stand-alone app
  3. As a generic card-control app provided by a third party

And it is well worth mentioning, most of what people are doing with debit card controls is based on a technology provided by a company called OnDot. OnDot has been providing card controls both directly to financial institutions and to card processors for years. It has pioneered this technology and is everywhere.

Back to the models for deploying card controls…

  1. The first way to launch a card control app is easy to understand. A bank puts card controls right into mobile banking. Literally, they add a button to the menu. This is the best experience, as it is fully integrated with other features used by active mobile bankers. Right now, when it is offered in this integrated model, 17% of active mobile banking customers use this feature every month. It is the sixth most used feature in mobile banking when it is offered. More than 225+ banks and credit unions have this feature launched as an integrated part of mobile banking.
  2. In the second model, the bank publishes a secondary app that complements the primary mobile banking app and provides only card controls. It might have a few additional features like card alerts and maybe a mobile wallet for Android (for whatever that is worth—volumes are very low for Android wallet transactions). But it is really a stand-alone card control app. Oh, and these stand-alone apps will have separate credentials that are different from mobile banking. Most times, the vendor who publishes this stand-alone app for the bank is NOT the mobile banking vendor— so sharing credentials is hard to do.
  3. And the last model, a generic app published by a card processor or network provider and shared by many banks. In this model, bank customers download a generic app and enroll their debit card. They are eligible because the bank has signed up for the service. The apps might have light branding once customers enroll their card, but generally it is a generic app used by multiple banks and credit unions. These apps also have card alerts and other associated features. Lots of community financial institutions are taking this path. Card processors such as Vantiv are making great strides in getting these generic apps in the hands of banks and their customers.

Three models: integrated, stand-alone and generic. Overall there are approximately 500 banks and credit unions with some form of card control available today in the App Store, using one of these models for launching. There is huge opportunity for others to follow and get into the market.

Let’s return to differentiation. Banks right now have an opportunity. Whatever model they choose, they can rapidly launch a card control app and get in the game. Some programs, such as the solutions offered by Visa and Vantiv, offer a rapid time-to-market solution, albeit one that’s slightly less integrated with mobile banking. These solutions allow a bank to get going ASAP. And the card processor offering is solid. Not perfect, but intriguing.

If a mobile banking vendor could not integrate card controls right now, launching a stand-alone app or a generic app makes sense. Ultimately, will stand-alone apps survive? Is this functionality better off being integrated directly into mobile banking? Verdict is out. Right now a vast majority of card control apps have been launched and integrated into mobile banking, so the data is incomplete.

What we do know is that when it is offered, whatever the model, people use the feature. They like it. Stand-alone is a new phenomenon, just surfacing in the App Store in the past few quarters, so it is very hard to say which model will win. Regardless, a marketer can take advantage of card controls to drive differentiation.

For the next 12-18 months banks have an opportunity to be known for providing debit card controls as a cool new service. Deposit account differentiation can be driven by cards—and marketers are gearing up to take advantage of this opportunity.

Robb Gaynor is co-founder and chief product officer of Malauzai, a developer of mobile and Internet banking solutions for community financial institutions. Email: [email protected].

Online training in digital, mobile and social media from ABA.