Thousands of institutions have decided they do not want to be directly responsible for managing a credit card program. For them, delivering credit cards under their own names within a third-party ‘agent’ relationship has well-served their resources and strategy while ensuring they have a competitive card product to offer to their market. But making this decision is not easy, nor should it be! There is much to think through:
- How will we know we properly surveyed the market, and ensured a competitive outcome? Are we speaking with someone who favors or maybe even only represents one partner?
- Financial impacts can be complicated: balancing near and future returns, redeploying a large cash payment to other use, assessing the different risk profiles of future cash flows, and understanding capital implications are just some of what must be considered.
- Different partners have different strengths, and no one partner is best for everyone. Understanding what motivates your reason to look at this option is critical to finding the best partner for you.
- Contractual language and obligations will be new to most every issuer considering this option, but the partners live in them every day. This can make it difficult to recognize any potential potholes to avoid or concessions which should be negotiated.
- Understanding the operational and cardholder experience impacts is central to a successful outcome. How your organization prepares to represent the go-forward program will determine success for many years after the initial outcomes of a properly managed negotiation.
We think it 100% accurate to say that no one in the entire country has analyzed and negotiated as many card portfolio valuation and negotiations from start to finish as we have. In fact, we are so well known and expert, that several agent program providers have asked us to consult on development of their own valuation models, product set proposals, and similar elements of their programs. Our entire process is designed to maximize the outcome, provide a full understanding of pros and cons, and to ensure that a portfolio valuation create no obligation or undue time burden on your institution unless you decide to go forward once you have a complete analysis in hand.
View a few of our case studies.