Walmart recently announced they are going through a card conversion from Synchrony to Capital One. This major switch leaves a lot of logistics up in the air for all parties involved.
Merchant and the New Financial Institution (FI)
It’s not unheard of for merchants to go through a card conversion. In recent years we’ve seen, Costco move to Visa, Cabellas switch to Capital One, Nordstrom to TD Bank, etc…
When companies undergo a card conversion, they have a significant amount of work to do just to get the cards back in circulation. They are practically working from square one with cardholders they’ve already acquired. Awareness is a large issue: they need to inform the new customers about the new loyalty program, fees, and all that goes into having the new account.
The merchant and new FI want the new cards out and in circulation as fast as possible. All card companies want to be Top of Wallet™. Meaning, they want to increase brand loyalty with each customer. The sooner the cards get distributed to customers, the sooner they drive people to their business and generate revenue. In addition, the faster the card issuer can get their customers using the new card at other businesses or websites, the sooner they can drive incremental revenues. For customers who have a co-branded card registered on several websites, there is a vested interest from the card issuer to get the new card back onto those sites as soon as possible.
Cardholders are affected by Card Conversion
There are different loyalty programs and fees associated with new cards. There is also the inconvenience of now having to go to every site and re-enter the new card number. Not to mention, if the original FI decides to re-issue cards instead of selling the debt, customers now have two new cards to manage. Card conversions may result in customers leaving, or loss of revenue from users switching to a different payment during re-issuing. Either way, the merchants and the FI’s need to capitalize on the new partnership. A smooth card conversion for the customers is the best thing for the business to reduce loss from the switch. All companies who have gone through a card conversion before have seen a loss. The good news is, there are ways to reduce losing customers or the time out of circulation.
There is more that merchants and banks can do to ensure a successful swap. Technology like the CardSavr™ API from Switch, Inc revolutionizes these processes. The API allows users to update their card from one place and add it to any other online shop. Not only does this make the life of the consumer easier, for the financial institutions and the merchants, CardSavr makes for a seamless card conversion. The technology gets the cards back on the market faster and in more places than the old school process does right now. Issuers have two big hurdles when sending out new cards:
1. Getting cards activated.
2. Having cards be used to the same (if not higher) magnitude as the previous card.
CardSavr is the best way to overcome that hurdle and successfully make the switch!