Our Strategic Sourcing service offering focuses on providing vendor selection, contract negotiation, program implementation, conversion, operational benchmarking, and business strategy development support for consumer credit, commercial credit, debit, ATM, and other card payment programs. Our clients include the world’s leading financial institutions, retailers, credit card companies, merchant acquirers, ATM deployers, and payment processors. From a functional perspective, we have expertise in card brand selection, core and ancillary processing services, and back-office servicing and operations. Our client reach is global in scope, and in addition to the U.S., we advise clients in Canada, Europe, Latin America, and Mexico.
Client Profile
Our clients include the most successful companies in the world. Their payment programs encompass consumer credit (general purpose, co-brand, and private label), commercial credit, small business, signature debit, PIN-network, pre-paid debit, ATM and alternative payment programs. Our clients span market sectors, the payments value chain, and geographical regions:
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Product & Program Expertise
We have extensive knowledge of, among others, the vendor community, competitive selection processes, program start ups and implementation, in-sourcing/outsourcing assessments, and contract negotiations. Over the course of 20 years, we have assisted financial institutions and others optimize program economics (i.e., costs and revenue from card brand/network participation) and select partners that best meet their strategic, financial, capability and risk objectives.
We have been on the front-line advising on most of the largest strategic sourcing deals in the industry: including advising three top 5 U.S. card issuers in outsourcing card processing services, recent large entrants into the credit or debit card issuing industry, the two largest private label card processing outsourcing deals in the U.S., many of the largest issuers in Canada outsourcing credit card processing services, many of the largest merchant acquirers in outsourcing merchant processing services, many top 10 financial institutions in selecting and negotiating card brand / network relationships, and several large and complex debit card and ATM conversions.
Our sourcing capabilities are listed below
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Project Highlights
In any given year, we complete over 25 engagements on behalf of financial institutions, card issuers, technology and servicing providers, processors, ATM deployers, and other payments industry participants. The highlights below are representative of the type and scope of assignments we complete and the results we help clients achieve.
Strategy / Benchmarking
- Assisted a top 10 U.S. financial institution evaluate bringing credit, signature debit, and merchant processing services in-house. Analysis included, developing evaluation framework, business requirements identification, project management of IT resources to size internal build/development efforts, and financial analyses.
- Supported credit and/or debit card issuers ranging in size from several thousand active accounts to over 30 million active accounts assess their processing relationships, develop their negotiation strategy and negotiate optimal processing agreements.
- Assisted a large North America card issuer in identifying commercial card processing functionality necessary to service a new customer segment.
- Assisted a leading card manufacturer in developing a robust model to estimate future card plastic volumes for key credit, signature debit, and pre-paid market segments.
- Supported a large European card issuer in benchmarking and assessing its dispute processing operations and performance.
RFP / Negotiation Support
- Managed a comprehensive RFP process and contract negotiations on behalf of a top 10 U.S. financial institution for card brand (consumer credit, commercial credit, debit, EFT network), signature debit processing, gateway processing, and card production services.
- Managed a comprehensive RFP process on behalf of a large North America Retailer for customer service, dispute processing, fraud detection, and other back-office credit card functions.
- Managed a comprehensive RFP process for one of the largest North American financial institutions as it evaluated outsourcing statement and card production functions.
- Supported a large bank’s vendor selection process for front-end and back-end merchant processing services.
- Managed an RFP process and contract negotiations on behalf of a new bank entrant for surcharge free ATM network participation and debit card brand services.
Implementation Support
- Assisted a top 10 financial institution in converting ATM processing from one provider to another. Supported the same institution in converting a large portfolio of ATMs and debit cards acquired via bank merger.
- Provided project management and quality assurance services to a top 5 U.S. bank related to the launch of their credit card portfolio on an outsourced platform. Also supported the bank in developing optimal process work flows for all servicing and decisioning functions and cardholder touch-points.
- Assisted a card issuer with the review and documentation of business requirements surrounding the calculations and terms associated with revolving card capabilities.
- Developed test plans and related scripts for the launch of a card program on an outsourced platform while managing the client’s testing resources.
- Assisted a top 10 financial institution evaluate implementing a Window’s operating environment and evaluate ATM content management software providers.
Insights
The payments industry is a complex, highly competitive and dynamic market with partnership decisions and sourcing strategies increasing in their importance and potential reward as well as in risk. Many financial institutions derive 50% or more of their business revenue from payments related activities, with card payments a primary contributor for many. Excess processing capacity, slowing card payments growth, financial institution consolidation, and other factors have accelerated the consolidation of many areas of the payments value chain, including processing and branded network service providers. Furthermore, macro-economic factors, regulatory scrutiny, growth challenges, and other factors will continue to challenge the stability of and economic returns available in the payments industry.
Establishing the proper partner relationships to optimize DDA value and business revenue and costs will be a critical success factor in the coming decade for issuers. Likewise, processors, networks, servicing providers, and technology providers will need to develop strategies and solutions to help customers navigate these challenging times while preserving their own shareholder returns.
We bring valuable perspective and insight to every client engagement and are uniquely positioned to assist industry players large and small implement the appropriate strategic sourcing strategies to compete effectively in today’s and tomorrow’s market and with the appropriate level of risk mitigation. We are confident our extensive knowledge of the sourcing and payments market, our ability to adapt approaches and tactics in a consolidating and dynamic marketplace, and our proven approach to strategy development and vendor selection will drive optimal results for our clients.
Leadership
Our Strategic Sourcing team draws on a pool of professionals with years of experience. The diversity of our client base coupled with the longevity of our client relationships allows us to bring insights that have been tested and proven.
For more information on our Strategic Sourcing leadership team, please contact:
