Planning for RFP success.

March 5, 2017 Lynn Larson

While conducting a request for proposal (RFP) process for a card issuer is typically not on anyone’s list of favorite activities, planning carefully can prevent future pain. At the National P-Cards on Campus Conference last week, I had the pleasure of moderating a general session panel on the topic of RFPs. Between the panelists and participating attendees, I gained a fresh perspective on four key aspects, as described below. Even if you are not doing an RFP any time soon, it never hurts to take notes now, so you are more prepared when the time comes.

Financial Model of Issuers/Banks

We know interchange feeds the revenue share incentives offered by issuers. However, there is the broader economic climate. Interest rates are expected to rise, which puts more pressure on banks. In turn, speed of pay could play a bigger role in proposals and, subsequently, your next contract. Is your organization willing to pay the issuer more quickly or frequently than in the past to maximize revenue share? It helps to understand factors like this when embarking on an RFP.

Whether to Include Treasury Services

An RFP that combines one or more card programs along with other banking/treasury services could be more appealing to issuers and result in greater benefits for you. A drawback is that one bank may not be the best choice for every piece. Some conference attendees also pointed out the lack of synergy between the card program management team and treasury department that would make RFP collaboration difficult. Nevertheless, it is a worthwhile option to explore in case it might be right for your organization.

Who to Invite to Bid

How do you decide which issuers to include? I was impressed with attendees who retain an active and evolving database of options, so they do not have to scramble later. The session also revealed it can be advantageous to take cold calls from issuers. Hear them out, as it could affect your future RFP and bidder list. In addition, prior to creating an RFP, attend industry conferences and speak directly with card issuers. Besides obtaining contact information (for the appropriate RFP recipient), ask questions that encourage meaningful discussion, such as:

How do you help clients grow their programs?
What resources do you offer for “X?” Consider what is most important to your organization, such as on-boarding suppliers, technology for auditing transactions, etc.
What do you recommend for solving “X” challenge? You might walk away with actionable solutions to help you today.

Duration to Keep an RFP Open

There were mixed opinions on this aspect. Eight weeks seems to be a good target that gives issuers ample time. Despite some content being boilerplate in nature, issuers (and their respective networks) have to do a lot of customization to properly respond to an RFP. On a related note, the timing of your RFP can matter. Launching one at or near year end (especially if only open for a few weeks) sends a message that your organization may simply be doing a “pricing exercise.” Poor timing and/or too short of a duration may prevent some issuers from responding.

Panelists and Conference Host

I want to acknowledge and thank the panelists from the session:

Larry Andress, Bank of America
Orson Morgan, Visa
Kathy Ann Sheils, Cornell University

Kudos to the conference host as well: Professional Development Group (PDG).

Use good planning to untangle the maze of a tedious RFP process.

Additional RFP Content

The aspects addressed here are just four of many. See other RFP content provided by Recharged Education, including previous blog posts:

RFP Assistance

If your organization is interested in external assistance for its next RFP, submit a contact form to learn how Recharged Education can support your process.

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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Cybersecurity threats abound.

February 14, 2017 Lynn Larson

Threats can lurk in strange places, so, as a card program manager, it is necessary to think broadly. Driving this point home, the presenter at a recent cybersecurity conference shared how a financial services company was breached through an unlikely source. It gave fraudsters access to all the company’s files, including sensitive client information. The source? A new thermostat in the building for which the company never changed the default password. If this story sounds familiar, it is reminiscent of the fraudsters who accessed Target’s POS systems in 2013 through the login of an HVAC company. Apparently, some companies did not learn from Target’s experience. What about your organization? Stories like these highlight how, even though you might be protecting data within your line of job duties, additional threats may still remain. Following is another example from the cybersecurity conference presenter and some things you can do.

Another Threat

Mobile devices represent another broad threat. The cybersecurity presenter recommended that, if employees access work email via their devices (and who doesn’t do this?), they should:

lock their device when not in use
have a strong password of letters, numbers, and characters to unlock the device

The presenter went on to describe how, if an employee were to lose their device, the employee should contact the company IT department, who should be able to remotely wipe out that employee’s phone to prevent fraudsters from using it. Lots of “should” statements. There are also complicating factors if it is a personal mobile device that the employee uses for work.

Could fraudsters access your card-related data through a back door?

Who is Responsible?

Going back to the first example, whose job was it to change the default thermostat password? It likely fell to maintenance personnel—people you would never think about as being potential gatekeepers to sensitive files. In reality, cybersecurity is everyone’s responsibility. Are all employees in your organization trained on security at least annually? What are your policies pertaining to mobile devices?

What You Can Do

If you are a card program manager wondering what you can do with this broad information, a good start is simply having a discussion with your management and/or IT representative. Since you handle sensitive information, it might also be beneficial for you to be part of a more general team within your organization that looks at security holistically. At a minimum, make sure you know:

where your card-related data is stored, including any sensitive/personal cardholder information
who has access and whether the access is appropriate
the potential vulnerabilities that could impact your program; for example, you do not want a lost mobile device in another part of your organization to open the door to fraud
what protective actions are possible to keep the data separate and restricted

Finally, continue to incorporate security topics into card program training.

Available External Resource

Ironically, just as I was about to publish this post, I was notified about the Verizon report, Data Breach Digest: Perspective is Reality, which is filled with cybercrime case studies and tips. If you want to dive in (it is a 100-page report), download it from: http://www.verizonenterprise.com/verizon-insights-lab/data-breach-digest/2017/.

“Data breaches—and the lingering postbreach
aftereffects—aren’t just an IT
security problem: they’re an enterprise
problem.”

— Verizon's Data Breach Digest

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Surcharging arguments in Supreme Court.

January 9, 2017 Lynn Larson

Tuesday, January 10, marks when the U.S. Supreme Court will hear arguments pertaining to a case by a group of New York merchants who claim New York’s “no surcharge” law violates their First Amendment free speech rights. Ronald Mann, a professor of law at Columbia, provided an argument preview last week, digging into the merchants’ claim and New York’s defense. Below is an excerpt from his post and the link to the complete content, which I encourage you to read.

Update

Visit the Surcharge News webpage to see the March 29, 2017, Supreme Court outcome.

In Review

When I reported last year that the U.S. Supreme Court (“Court”) agreed to hear this case, I observed what could happen if the merchants are successful. Specifically, it sets the stage for the removal of “no surcharge” laws in the handful of states, including New York, that have such laws. This would not necessarily lead to a pike in merchants surcharging for credit card use, but it is certainly something to watch. It could be days or weeks before the Court renders a decision. Stay tuned to Recharged Education!

The surcharge battle has been a long one. We now await the outcome of the case presented to the U.S. Supreme Court.

Excerpt from Ronald Mann's Post

Argument preview: Merchants bring payment-card interchange wars to the Supreme Court

The remarkable volume of amicus briefs underscores the high stakes in play: twelve in support of the merchants, ten in support of New York, and one (from the United States) in support of neither party. In part, the variegated interests reflect the cross-cutting concerns that the litigation raises. Because the case turns on the doctrinal framework for assessing commercial speech under the First Amendment, First Amendment scholars are concerned, weighing in with dueling amicus briefs on each side of the case. Because a central debate in the case involves the idea that consumers react differently to “discounts” and “surcharges,” behavioral economists have a lot to say; competing groups of economics scholars also chime in on both sides of the matter. Consumer advocates concerned about the market power of credit-card networks appear in support of the merchants. Other consumer advocates join state governments in supporting New York, attempting to ensure that states are free to adopt consumer-protective pricing regulations. And that doesn’t even get to the briefs from businesses with a relatively direct interest in the question as a matter of profit and loss.

Access the complete content, including his conclusion on the main thing to watch.

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