Are end-users placing a burden on issuers?

A study by the Governing Institute indicates the answer to this question might be “yes” for state governments’ prepaid debit card programs (more on this below). I think their findings could apply more broadly. As an end-user, I participated on an RFP team for card issuer selection, so I know firsthand how quickly “desirables” shift into “requirements.” The problem is, excessive requirements can limit the number of issuers who bid on a program and, ultimately, the end-user may lose out. Following are three things driving this issue and tips for avoiding the trap. 

About the Study

The Governing Institute explored challenges confronting the state prepaid debit card market and released a report of their research in 2016 (Is the State Prepaid Debit Card Market in Trouble?). States use these cards to distribute benefits payments tied to various assistance programs, unemployment insurance, child support, etc. Yet, as the report (“Report”) notes, they may be unintentionally pushing issuers out of the market with new requirements, such as increased program support. This leads to the first point...

1. Desires

We dream big. The retail industry has programmed us to want it all and get it on sale. I think of home buyers in an HGTV program. Their budget is $150,000 and they want move-in ready, a convenient location, four bedrooms, outdoor living space, hardwood floors, etc. In the end, they have to compromise by increasing their budget or letting go of some “must haves.” 

Based on the Report, states’ prepaid debit card programs could use more compromise. I imagine the same thing could be happening with card programs elsewhere. 


When selecting an issuer, carefully consider what is a requirement versus an interest or a nice-to-have. After creating a list of requirements (hopefully short), validate them:

  • Ask yourself if you are willing to completely reject a proposal (no matter how enticing the revenue share incentives) if the issuer cannot meet a stated requirement.
  • Do some fact finding before releasing an RFP to determine how many issuers can accommodate your requirements. If only one or two, you might want to revisit your list.

2. Perceptions

End-users generally do not think they are asking too much of issuers and, in many cases, they are right. However, as the Report points out, state officials may not be aware of how even small changes in RFP requirements affect issuers’ profitability. Further, the Report shares how issuers may compound the problem by not taking charge of the education process. Overall, there is often a communication gap between issuers and end-users.


Understand the factors that impact issuers’ profitability. They make money through the fee suppliers pay for card acceptance. Revenue sharing incentives for you mean they give up some of this money. Issuers also provide technology solutions and customer service. They have other overhead costs and incur the cost of floating the funds for your transactions until they receive your payment. 

 The weight of end-user requirements might be prove to be too much for some issuers. 

The weight of end-user requirements might be prove to be too much for some issuers. 

Recognize where your program likely ranks in an issuer’s portfolio. Low card spend (as defined by the issuer), slow payments, and regular use of their customer service resources are things that collectively lower your rank. Does your program justify what you are asking of issuers?

3. Losing Sight of the Value

The Report observes how the perception gap creates an urgent issue. In response to an end-user RFP, a single proposal or none at all could mean an organization is “just a short step to the expensive, time-consuming process of paper-based payments.” This makes me wonder how many organizations would be willing to forego card programs altogether rather than reevaluate their “requirements.” How important are card programs to the organization payment strategy?


Review the benefits of Commercial Cards and identify how they have specifically helped your organization. Quantify as much as possible, such as the process savings. Do not lose sight of the value. Conversely, if you eliminated, or even severely restricted, card payments, how would this affect your operations and employees? Chances are the resulting inefficiencies would require additional staff. 

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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