How Banks Can Achieve a Smooth Payment Processing Tech Migration

The Alpha generation is on the rise. Born post-2010, these true 21st-century natives will eventually surpass the Baby Boomer population and introduce a fresh set of expectations for banking relationships. Alphas have little loyalty to institutions, including banks and credit unions, and demand seamless, integrated digital experiences and relevant credit solutions. As such, the Bank Administration Institute (BAI) reports that an overwhelming 83% of financial services firms feel an escalating push to undertake digital projects, driven by worries of being outpaced.

But digital transformation is more easily embraced in theory than reality. In fact, one of the biggest hurdles that banks face when undergoing a digital transformation is migrating payment processing from one credit card issuer processing provider to another. If you have ever wondered when it is time to switch credit issuing providers, what to look for in a new provider and what challenges you might face in the transition, read on.

How Do You Know When to Switch Card Processors?

You wonder, “Should I switch payment processors?” Many times, the answer is yes, and often, the sooner, the better. According to a 2023 BAI survey, more than 55% of consumers said they would switch financial institutions for one with better digital capabilities. Accustomed as they are to banking-as-a-service (BaaS) and credit-card-as-a-service (CCaaS) models, the digital expectations of Alphas and the following generation, Betas, will be even greater than past generations.

Aging legacy issuer processing platforms designed decades ago cannot keep pace with today’s agile, flexible digital issuer processors. What’s more, banking leaders who have managed these legacy card issuing processors have never encountered digital transformation on this scale, so native cloud-based digital technologies that offer agile, bespoke consumer credit solutions and commercial credit solutions are difficult to combat.

Unfortunately, it is not uncommon for many financial institutions to attempt greater digital integration by outsourcing issuer payment processing. However, one-size-fits-all solutions rarely bear much resemblance to the customized credit card issuing solutions their customers want. A McKinsey report finds that though digitization is imperative for banks, just 30% of banks that have embraced digital transformation have managed to do so effectively, with most failing to achieve their intended goals.

Nevertheless, business requirements should drive technological decisions, not fear. Digitization is indeed necessary for banks to stay competitive. However, a more robust digital presence can also help banks build market share, grow revenue and gain efficiency.

What Should Your Bank Look for When Vetting a New Issuer Processing Provider?

When vetting possible issuer processing providers, choosing the right partner with the right platform is essential. A good partner delivers expertise based on a proven record of success, uses proven processes and data migration strategies, communicates proactively and offers flexible, migration-ready technology.

The exercise should focus on driving revenue growth as quickly as possible, with the least operational complexity. A good card issuing partner should offer modern digital features that can be implemented quickly, leaving lots of room for future growth.

A significant consideration when migrating credit card portfolios to new processors is data mapping, including mapping interest rates, fees, and rewards balances. Late fees need to be set up the same way on the new platform as on the old program. Additionally, interest rates must match product by product and rate by rate. For example, many consumers have promotional rates, such as 0% for 12 months on balance transfers. The balances on nonpromotional rates will also need to be mapped correctly.

Minimize Downtime and Maximize Results through Seamless Migration

Despite its importance, changing issuer processor companies is risky; errors are simply unacceptable. i2c reduces credit card data migration errors by minimizing the risk of provider migration. Surprisingly, it can take a short time. By leveraging innovative technologies like AI while prioritizing data integrity, i2c can quickly set up your platform to meet your desired timeframe. This enables you to evaluate your new system alongside the existing legacy infrastructure.

Our dedicated migration team works with your institution, optimizing your credit card data migration and making sure our solution addresses your business strategy and makes your bank more competitive, not more vulnerable. At the same time, we minimize disruption to cardholders so that customer trust and satisfaction remain high.

Migrating to a new digital credit card issuer is no easy task, so your financial institution needs a partner with the expertise and technology to give you more options to tackle next-generation payments. When you partner with i2c for digital card issuing, your institution works with a dedicated group of our cross-functional experts from start to finish. Our careful data mapping, 60-day rehearsal and detailed project planning ensure that none of your critical data is lost. Let’s work together to make sure your institution remains competitive within our rapidly changing digital landscape.