Choosing the Right Issuer for a Private Label Credit Card

There are plenty of reasons to initiate a private label credit-card program for your business. From saving on interchange rates to gathering data on your customers’ shopping habits, a private label card program can help you gain new customers, retain their loyalty, and grow your business.

But you can’t do it on your own. You need a credit card issuer that will guide you through the process and make sure it all goes according to plan. Given that your issuer will be providing their services and expertise, you want to make sure you choose the right one. You’ll be in it together, so it needs to be a good match.

So what things should you be considering as you shop around? Armed with the following guidelines, you’ll know what to look for, what questions to ask, and what you should expect from the relationship. While by no means an exhaustive list, these baseline recommendations could go a long way toward making your card “top of wallet” in the minds of your customers.

  • Seek transparency. This goes for any business relationship, but it bears stating here. Your credit card issuer should be completely open and honest with you about realistic goals and timelines for implementation as well the expected business results. Anything less will result in a confusing, difficult-to-use program that customers will not be keen on adopting. Once the program is in place, your account management team should remain accessible and eager to offer their ongoing assistance, too. This includes making all metrics and statistics about the program’s success available whenever you need it.
  • Understand the offerings. Some issuers offer a portfolio of solutions, so it helps to educate yourself on the basics first. A private label card can only be used at your stores, while a co-branded credit card might have your logo on the front but otherwise works just like any other credit card complete with a Visa, MasterCard, or Discover imprint. This seems like a subtle difference, but the implications are quite large. Is your customers’ brand loyalty strong enough that they’ll want to reach for your card wherever they are, or are they more inclined to reach for your card only in your store, in return for discounts and other perks? Your card issuer should be able to provide some guidance, and alignment is critical. You may choose to start with a private label card, but wish to keep the option of adopting a co-brand card as well. In this case you’ll want an issuer that can offer both.
  • Put the customer first. Remember that while the behind-the-scenes financial setup is certainly important, it should never eclipse the needs of your customers. The program—from restrictions to rewards—should be as easy to use as possible. You want a partner who understands this as well. One common pitfall: offering great signup incentives but few reasons to keep using the card on an ongoing basis. “The point is to keep customers loyal, activated, and engaged,” says Mike Swartz, VP of co-brand partnerships at First National Bank of Omaha.
  • Know each customer’s value. Assess data about your customers beforehand—it will help with putting together a valuable package. Who is most likely to adopt the program? How much more valuable will these customers be than someone who uses a typical bank Visa card? You’ll be able to add to and refine these metrics once the program is in place, but it will be helpful to bring some data to the table to inform your discussions with the issuer.
  • Find the right scale. As you go through the process, you might find that you have choices. You can partner with one of the major national card issuers, where, depending on your size, you might find yourself the proverbial small fish in a big pond. This isn’t the only option, however: there are also small- and middle-tier issuers that might be more appropriate for your business. You need to be realistic on this point, because attention, resources, and access each hang in the balance. You want to give yourself the proper seat at the table.

First National Bank of Omaha has been steadily growing its a portfolio of private label clients. The bank entered the space when it acquired Sheetz as a client, and has since added SuperAmerica and QuikTrip to the mix. The issuer’s private label solution will continue to expand as it builds and deepens its relationships with major partners.

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