» Ebook

How data can propel

your credit program
» Ebook: How data can propel your credit program

In an age where customer loyalty, service

expectations, and digital experiences are becoming
increasingly personalized and integrated into the
brands people love, a new survey has revealed that
over 50%1 of US consumers now own a credit card
affiliated with a brand.
Even more surprising: Up to 62% of customers consider themselves loyal to the brand or store, instead
of the bank partnering with them on these co-branded cards. This is particularly true among younger
consumers, who reported feeling least satisfied with their current credit cards and most open to applying
for a new one. These findings showcase how valuable it can be for businesses to embed credit solutions
directly into their offerings, as this will allow them greater reach through providing tailored experiences
that meet customers exactly where they are.

50%
of US consumers now own a
credit card affiliated with a brand

62%
of customers consider themselves
loyal to the brand or store, instead
of the bank partnering with them
on these co-branded cards

2
» Ebook: How data can propel your credit program

Data is a valuable asset for

credit card issuers
Data – it’s a word that we hear bounced around often, but what does it mean to leverage that data and
what data are we talking about? As the owner of a relationship with your customers, you have access to
an arsenal of data on how they shop, how they spend, and what matters most to them.

Depending on whether your end user is a consumer or a business, you’ll have different
types of data available. But either way, the data you have access to can be used not only to build a
deeper understanding of your relationship with your customers, but also to build a credit card offering
that is tailored to their needs, wants, and spending habits.

Example of a Consumer Credit program Example of a Commercial Credit program

A consumer-facing brand has a loyalty A SaaS platform provider serves SMBs with
program that has successfully gained the business accounting solutions. This SaaS
trust of its customers. It can further deepen company deeply understands its customers’
its relationship with them by offering a pain points and wants to improve its offering
co-brand credit card that enables customers with credit solutions that can help its
to build on their loyalty statuses and gain business customers:
access to exclusive perks:
• Improve value prop to business customers
• Gain insights to their spending patterns by giving them deeper controls around
outside of your program, helping you spending
better understand your customers •B
 uild loyalty by offering businesses a
• Build loyalty by expanding how you line of credit and helping them optimize
reward consumers and building more their funds
personalized offers •D
 ata to help identify businesses that may
•B
 uild brand equity by expanding into new benefit from additional products related
touchpoints/delivering a branded solution to its core offering
• Open a new revenue stream

3
» Ebook: How data can propel your credit program

By working with modern card issuers and program managers, any brand can now be a credit card issuer
– empowering brands to deepen their customer relationships.

Data from credit card transactions are invaluable assets that can give issuers (you) deep insights into
cardholder purchase patterns, needs, and behaviors. With this data, issuers can more precisely tailor
their card programs to customers.

Every transaction, no matter the size, provides rich information on the who, what, when, and where
of cardholder behavior. When a credit card transaction is made there is an abundance of data that
runs over the rails. Including the merchant ID, the MCC (merchant category code, ) the location of the
purchase and much more.

Marketers can perform advanced segmentation to slice and dice the data, which opens the door to
understanding customer needs across geographies, income, age, and other attributes. Using these
insights to devise individualized rewards and offer strategies, modern credit card issuers can effectively
target customers whose needs are not met with current offers.

“When a credit card transaction is made, there is an

abundance of data that runs over the network rails. That
includes the merchant ID, merchant category code,
location of the purchase, and much more.”

- Randy Fernando, VP of Product, Marqeta

4
» Ebook: How data can propel your credit program

Driving credit card revenue through

advanced data analytics
Transaction volume matters, not only because of the interchange fees and potential interest from
each transaction, but also because of the wealth of knowledge generated with every use of a payment
card. Card transaction data can be a powerful tool, and when correctly leveraged, it can be a valuable
tool in identifying opportunities and increasing profitability. In this post, we discuss one of the most
underappreciated and undervalued components of credit card programs: transaction data.

Transaction data aids customer

acquisition and retention
In prior decades, differentiating credit card programs was pretty basic. Generally, there were three
types of credit card features: rewards, low interest rates, and secured cards. As a result, the only way to
really get the attention of prospective cardholders and gain traction in the market was marketing. If you
can quickly blurt out the slogan for a credit card, then you know what we’re talking about! Many card
program managers were forced to spend millions on marketing and advertising campaigns to acquire
and retain customers. In fact, according to Statista, one well-known credit card company earmarked
nearly $2.9 billion for marketing expenses in 20212.

If you don’t have millions, let alone billions, to devote to advertising your credit card, don’t worry.
Another important lever for marketers is experimentation. Using a modern card issuing platform gives
issuers an opportunity to quickly and compliantly test new rewards or offer strategies that go far
beyond cashback and miles. They can involve traditional investing, or even revolve around mission-
oriented initiatives like health and wellness or climate change.

Through experimentation and allowing

cardholders to react, data can enable issuers to
seize opportunities to turn non-spenders and
low spenders into active users.

5
» Ebook: How data can propel your credit program

Transaction data can mitigate

credit card fraud
Data models and rich data have the potential to help issuers with better fraud decisioning. Of course,
fraud is among the most pressing issues facing the industry, and every issuer is devoting time and
resources to detecting fraudulent transactions.

By leveraging large datasets of transactions and applying more sophisticated models to find anomalies,
issuers can contribute to better fraud decisioning and reduce false positives. This increased precision
improves customer experience at checkout by achieving higher rates of successful transactions.

Simple questions to evaluate

portfolio performance
Generating revenue while balancing risk is the goal for any credit product, and data is key to achieving
that goal. Issuers should expect to be able to easily obtain performance metrics through a dashboard or
user interface. Here are some simple considerations to evaluate performance:

Is the portfolio growing by accounts versus last month and/or last year?

Are balances What is the status of Is fee income Where do we stand

growing? credit utilization? stable or growing? on interest income?

Additionally, transaction and account data can also provide actionable insights related to payment
patterns, charge offs, and non-performing accounts, all of which can be important to accurately assess
the health and quality of the portfolio. By monitoring credit card portfolio performance like this, you can
become confident that the card is adding value to the business and its growth.

What do you do with all this information? After it is gathered and analyzed, this could guide decisions
about tweaking pricing through fees or APRs. You might find your card is no longer top-of-wallet due to
false positives, leading to changes in fraud mitigation strategies. Your revenue teams can use it to come
up with strategies to reposition the program so as to outperform competitors.

Making strategic and impactful portfolio decisions based on cardholder behavior data can help you
better position your offerings and increase cardholder spend.

6
» Ebook: How data can propel your credit program

Learn more about successfully

launching a modern credit
card program
Not to be overly dramatic, but the fact that transaction data is often taken for granted and not
fully leveraged by issuers is a tragedy. At Marqeta, we work to make data easily accessible and
understandable so issuers can analyze key program performance metrics and adjust course as
appropriate. Want to learn more? Talk to a credit expert on ways a credit card program can help
you build loyalty with your customers, we are here to help you harness the power of data.

7
 » Ebook: How data can propel your cedit program

About Marqeta
Marqeta’s modern card issuing platform empowers its customers to create customized and innovative
payment cards. Marqeta’s platform, powered by open APIs, gives its customers the ability to build more
configurable and flexible payment experiences, accelerating product development and democratizing
access to card issuing technology.

Its modern architecture provides instant access to highly scalable, cloud-based payment infrastructure
that enables customers to launch and manage their own card programs, issue cards, and authorize and
settle transactions.

Marqeta built its simple, trusted, and scalable platform from the ground up to help companies design
seamless payment experiences, streamline purchase flows, and bring products to market faster while
minimizing fraud risk.

• Card issuing: Instant issuance of physical, virtual, and tokenized cards with direct
provisioning to digital wallets

• Card processing: Real-time funding using our Just-in-Time (JIT) Funding™ feature with
dynamic spend controls to reduce fraud

•Card applications: A suite of applications and tools that help you build, manage,
and run your card program

• Modern architecture: Developer-friendly, modern open APIs, cloud infrastructure, and webhooks

Marqeta is headquartered in Oakland, California and is enabled in 36 countries globally. For more
information, visit www.marqeta.com, Twitter, and LinkedIn.

You see a card. We see endless possibilities.

1
2023 State of Credit Report
2
Marketing spending of Capital One from 2015 to 2021, Statista

marqeta.com facebook.com/marqetainc linkedin.com/company/marqeta-inc twitter.com/marqeta