Justify Customer Acquisition Costs by Staying Top-of-Wallet

Justify Customer Acquisition Costs by Staying Top-of-Wallet

Jun 7, 2022

There are plenty of ways for credit card issuers to attract new clients: Point programs, cashback, eliminating monthly fees, attractive payment plans, and more. And yes, all these tactics have a cost: they take time, money, planning, and some serious human resources to manage.

And acquisition is only the first step. Next, you need to encourage those customers not just to carry your card, but to consider it the card: to keep it top-of-wallet. Customer engagement programs have to expand and perform smoothly, with plenty of perfectly-crafted marketing messages to remind those customers of all the incentives you offer to keep your card top-of-wallet, permanently.

Great. So let’s say you’ve done all that, and it’s working: Yours is the first card customers grab from their pockets or click on their screens. Payments are growing, social media is buzzing, and transactions are multiplying. Your team has done its job.

For many customers, your success won’t last.


All that work for nothing?

We all know the saying, “It’s more expensive to acquire a new customer than to keep an existing one.” Yes, it’s painful when you invest in all that work, get your card to the top of that wallet, and then … in one single user experience, lose your position.

But how does it happen? Through a common phenomenon that plagues the industry: False-positives on fraud checks that trigger a declined transaction. The algorithms are good, but they can only make educated guesses and approve payments based on probability. And they’ve got limited data to work with.

The more transactions an issuer bank processes, the more it happens. And rarely does a technology create friction and frustration for every single party involved.

Most customers won’t bother arguing or trying to solve the mystery. Assuming they decide to patiently try again (and often, to the merchant’s chagrin, they don’t), they simply grab a competitor’s card and hope for credit card approval. If this were a one-time event with no long-term repercussions, it’d be considered the cost of doing business and maintaining a digital defense.


The Long-Term downside of a conservative stance

But there’s usually one more result, and it has a longer, more severe impact: The customer drops that particular card to the bottom of the list for future payments – either in a physical or a digital wallet, both of which take little effort – and future purchases go to a competitor’s card.

So how do you eliminate this core weakness and retain your edge over competitors to approve more transactions? By leveraging data that the merchants already collect, as well as their resulting analytics. Based on purchase patterns and customer profiles, they know much more about the specific transaction and the user behavior at this particular time. They can supply their own fraud prevention systems with rich data that provides a more accurate assessment of the customer – and risk – involved. That data – if you had it – would often give you the confidence to proceed with a transaction, even when the standard, superficial analysis leans toward an over-cautious position.

Unfortunately, merchants have no way to share all transactional data and analytics with issuers directly. That’s where Kipp comes in. By integrating with a merchant’s fraud prevention providers or PSPs, we collect and assess that customer data on the merchant side, and then act as a bridge. By adding this complementary data to the existing models you already use, we instantly fortify  your own decision-making process to let you confidently authorize more transactions. 


The Merchant’s got you covered. Literally.

Not only do you get assurance that this transaction is a good one, you get  – in advance! – a premium to cover any potential risk that still remains, allowing you to approve the transaction without worry. Here’s how it works: we serve as a mediator, and ask you to price the risk to cover any potential loss if the transaction is indeed fraudulent. If the merchant is willing to bid more, then the transaction is approved: the merchant makes the sale, you take the fees, and the customer completes the transaction smiling, rather than demoting your card to the bottom of the pile. 

If you’re an issuer who wants a safe, innovative, way to accept more transactions without additional risk,  Contact us to get started today.