June 25, 2007

There's Money in the Cards

There definitely is money to be had in cards, says Trevor Pavey, director of contactless cards with Dallas-based Texas Instruments. "This is a very attractive space to work in as banks see a huge cash market," he says. "Banks are always looking for innovative ways to grow." According to Pavey, banks can take advantage of newer technologies, such as contactless payments, to reap rewards in low-value payments areas, such as transit payments and payments at fast food restaurants.

"Cards don't strictly provide interest income," comments Greg Hammermaster, SVP, treasury management solutions, commercial card division, with Atlanta-based SunTrust ($182.2 billion in assets). "They provide fee income. You also have the ability to better package products together." He says product bundling works very nicely with cards. "The card is very effective for this. You can package a lot of perks and products together on a card, and it becomes a bundled solution for clients," Hammermaster adds, noting that SunTrust pursues the strategy.

But, Hammermaster warns, it is important to realize that there is no one-size-fits-all approach to meeting clients' service needs, particularly on the commercial card side. Therefore, the bank offers modular applications to its clients.

"In many cases, a company can't bite off our full end-to-end solution because it's a very resource-heavy thing to do," Hammermaster continues. "That's why modular applications are more effective," he explains. "If a client just wants to start off with our expense reporting module for [travel and expenses], they can, and will have the ability to grow in the future."

According to Hammermaster, SunTrust uses a mix of technologies from both its own IT organization and outside vendors. "An important aspect for a top-tier card issuer is to bundle solutions together to meet clients' needs," he says. "Taking a modular approach to implementation helps you understand and better target what your client wants."