NOVEMBER / DECEMBER 2008 All debit all the timeSM pulsationsThe Debit News MagazineSM Focus on Participant Support PULSE’s 2008 Achievements ULSE has just completed its 2008 “This has been an outstanding year for Consumer Debit Awareness Campaign and fiscal year, a period marked by PULSE,” said Dave Schneider, PULSE increased PIN debit interchange revenue Psignificant growth and a renewed president. “Besides continuing our strong to financial institutions for the third con- focus on customer service. The network growth, we signed a number of important secutive year. Despite these successes, we not only experienced sizeable increases in issuer agreements in 2008, launched a remain cognizant of the fact that this is a switching and settlement volumes, but has (continued on page 11) expanded its support of participants through exciting new channels. PULSE achieved 17 percent growth No Slowdown for in total transactions in 2008, compared to 2007, and a 23 percent increase in total dollar volume for the year. The network Electronic Payments also completed its first full year of opera- tion of the DebitProtectSM fraud detection he 2008 Study of Consumer Payment a little more than one-third of consumer and alert system and initiated pilot pro- Preferences, co-sponsored by PULSE payments overall. Even in the area of bill grams promoting “pay at the table” debit, T and conducted by BAI and Hitachi payment, the traditional stronghold for an exciting new payment option. At the Consulting, indicated that electronic paper checks, electronic payments were same time, PULSE continued to emphasize payments now account for 63 percent of up, with 62 percent of consumers prefer- no-cost participant services such as the consumer payments, which is up from ring this payment method. annual PULSE Conference and expanded 43 percent in 2001. Paper-based payments The study showed the average con- professional development opportunities. continued a downward slide, representing sumer makes 52 payments every month, (continued on page 9) Revitalizing Your What’s Next for Taking Aim at Debit Program Debit? Debit Fraud Page 5 Page 6 Page 8 VIEW FROM THE TOP Dear PULSE Participant, n pondering the unraveling of the global economy that occurred in 2008, I am reminded of the fact that no one has a crystal ball when it comes to predicting the Ifuture. Yet, the ability to anticipate and understand the potential impact of future challenges is vital for those institutions that want to compete at the forefront of the financial services industry. As we enter 2009, I think it is appropriate to reflect on the state of the debit industry in light of the economic downturn and tightening credit market that financial institutions currently face. Dave Schneider As a payment method, debit continues to enjoy double-digit growth rates, although it is beginning to mature and some slowing of growth has occurred. I see significant upside potential for debit in 2009 and beyond, even when faced “I see significant upside with challenging economic conditions. That’s because debit remains an attractive option to more traditional forms of paper-based payments, and for many consumers it potential for debit in 2009 is an effective tool for helping to manage spending, especially when combined with the and beyond, even when many products and services financial institutions provide to consumers. At PULSE, we are “redefining debit” to help financial institutions prosper in the faced with challenging current economic climate, and to better position themselves for the future. The 2009 PULSE Conference, Debit ReDefined, is one way we will help our participants improve economic conditions. That’s the profitability of their debit programs in the coming months. Two additional components of PULSE’s effort to redefine debit are: because debit...is an effective tool for helping Focus on Risk Management – Enhancements under way on DebitProtect, PULSE’s industry-leading fraud detection system, include monthly and quarterly reporting, [consumers] to manage rules-based fraud alerts and fraud prevention analysis. spending...” Emphasis on Profitability – With PULSE, financial institutions enjoy highly com- petitive PIN debit interchange rates and low fees. Our comprehensive Interchange Analysis can show you how to maximize debit reach and boost profitability by using PULSE exclusively for PIN debit. I urge you to contact your PULSE account manager to take advantage of this complimentary analysis. Thanks for helping make 2008 an outstanding year for PULSE. With your continued strong support, we will continue to deliver the highest possible value to all network participants. Sincerely, Dave Schneider President All debit all the timeSM 2 PROFESSIONAL DEVELOPMENT Providing Professional Development and Training in 2009 n a continued commitment to keep Open to all participating financial SM participating financial institutions institutions, attendees will learn more PULSE Academy informed of industry developments about the network and how PULSE can I January Customer Segmentation and trends, PULSE will offer a wide help improve existing debit programs. range of webinars and meetings in 2009. February 2009 Network Update These sessions will provide participants 2009 PULSE Conference March Emerging Technologies with information about new and exist- The conference will feature ing payments products and services. nationally recognized speakers, a April Importance of Your EFT Below is a list of just a few of the dynamic Insights & Solutions Forum Programs upcoming events, all offered at no with payments industry leaders and June The Future of ATMs charge. debit-focused concurrent sessions. Complimentary conference registration July DebitProtectSM PIX2 Training is offered to all PULSE financial Each quarter PULSE will host PIX2 institution participants. For more September Legal and Regulatory Training webinars to provide updates conference details, see the article on Update and information relative to the auto- page 6 of this issue of PULSATIONS. October EFT 101 mated exception item system. For more information about PULSE’s November Mobile Banking PULSE Network Update professional development program, visit This new webinar will be offered on www.pulsenetwork.com. To be added to a quarterly basis to provide the latest the mailing list, contact Melissa Voelkner information about network services. at [email protected]. PULSATIONS and PULSATIONS Online Win BMA Houston Lantern Awards he Business Marketing Association (BMA) Houston Chapter has T awarded PULSE’s communications and marketing team with its highest honor, the Lantern Award ... twice. The Lantern Award honors break- through creative work and raises the bar for marketing communications efforts across all media. PULSE received Lantern Awards for PULSATIONS, The Debit News Magazine and for PULSATIONS Online, a Web- based version of the same bi-monthly publication. The PULSE team also received an Award of Excellence for its PULSE is Debit capabilities brochure. To see past issues of PULSATIONS (Left to right) Cindy Ballard, Rosie Van Wright, Casey Robinson, Melanie Tumbleson, or to view PULSATIONS Online, visit Anne Rhodes, Cheryl Garcia, Steve Sievert, Megan Dickerson, Erin Duplechin and www.pulsenetwork.com/pulsations. Sheryl Fish (not pictured: Ralynn Bowden, Melissa Voelkner) 3 p u l s e n e t w o r k . c o m Who’s Your CPO? By Stan Paur, PULSE Chairman The significance of electronic payments account holder satisfaction and the compe- to the financial industry is borne out by tition. In addition to understanding the recent studies. A 2008 study by Cisco economics of the program, this individual Systems suggested that “payments” in could focus on issues such as fraud, general constitute as much as 45 percent rewards offerings and the rules associated of revenues and 40 percent of profits for with the payments programs your institu- financial institutions. One must assume tion offers. Finally, this person should that, with the use of checks declining pre- intimately understand the contractual cipitously, more and more of this income requirements of the financial institution’s is coming from electronic activity. existing network and processing relation- Moreover, nearly two-thirds of pay- ships as the financial community is offered ments are now conducted electronically. more choices and competition. The institu- Although the dimensions of the income tion’s options need to be preserved so that stream from electronic payments might issuers can select those products that be modest to many financial institutions, afford them the greatest flexibility and recently was invited to serve on the the importance of offering competitive return on their EFT investment. board of directors of a community bank. electronic payments products cannot be I suspect that few institutions today This opportunity has been a way for me I ignored. In simplest terms, a financial insti- have christened anyone as their CPO. to gain insights into the key issues and tution today, regardless of its size, must However, when one reflects on the growth challenges faced by bankers. offer an array of electronic services to of electronic payments and their economic I presume this particular community satisfy its account holders. and strategic importance, the role of CPO bank is not much different than its counter- While one might argue the relative may someday become common for more parts in terms of the topics they focus on economic significance of these new forms and more institutions.