By PYMNTS
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Debit cards are used several times a day without attracting much attention until the moment something goes wrong.
A declined grocery purchase, an unfamiliar merchant name in a banking app or a card shut down because of suspected fraud can quickly change how a customer views the institution behind the card. The stakes are greater when debit is the consumer’s principal means of payment, and there is no readily available alternative.
That puts pressure on banks and payments providers to look beyond whether a transaction technically works and consider the experience surrounding it, Justin Monk, vice president of Debit ATM and Software at FIS, told PYMNTS.
The relationship now begins with digital account opening and extends through instant provisioning, wallet access, money movement, transaction controls and fraud management.
The ease of opening another account has also changed the consequences of a poor experience. Consumers can add a competing financial relationship without formally leaving their existing bank, creating what Monk described as a “soft switch” in which customers test another provider and gradually redirect their activity.
“The big pain points in the ecosystem have been figured out over time,” Monk said.
More recently, however, consumers want to customize their experiences.
Expectations can vary by generation. Young consumers may be more comfortable with digital enrollment, instant credentials and new security features, while older customers may require more explanation or support. That complicates product development because an issuer cannot assume that every feature that improves security or functionality will be understood in the same way by every cardholder.
The optimal debit experience, then, is one in which the card remains available when the legitimate customer needs it, while security controls operate with as little unnecessary interruption as possible. That balance becomes especially important when a fraud system declines a valid purchase.
The accumulated effect of such incidents can eventually undermine the relationship, Monk said.
“This is not to say that one [pain point] by itself will cause a cardholder to go someplace else, but multiples of these stack up over time, and it adds to a level of frustration,” Monk said.
Better Data Can Reduce Debit Friction
One source of friction, the quality of transaction data moving through the payments system, sits far from the consumer interface.
“The data is foundational to all the downstream systems that utilize it,” Monk said, pointing to chargebacks and fraud rules.
Improving that information flow can help issuers make better fraud decisions, reduce false declines and prevent avoidable chargebacks. The consequences can be particularly disruptive with debit because freezing or replacing the card can temporarily separate a consumer from the money used for everyday expenses.