FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Velocity Solutions, Inc. recently launched an innovative program that allows community banks and credit unions to offer multiple checking options to their account holders while generating a new revenue stream – all with no cash outlay to the vendor providing the program.
The program addresses increasing consumer demands, lack of account holder loyalty, and the loss of overdraft and interchange revenue experienced by many financial institutions after regulatory changes took effect in 2010. “The playing field is more competitive than ever,” said Christopher Leonard, CEO of Velocity Solutions. “Not only do community banks and credit unions have to please a diverse group of account holders with vastly different wants and needs, but they have to do so while generating a profit. To thrive in this environment, financial institutions must seek new sources of fee revenue,” Leonard added.
Velocity’s solution, offered through its affiliate My Rewards, LLC, is the My Rewards™ Premium Debit Card program, which gives account holders the option to upgrade their basic debit card to a gold or platinum card for a monthly fee. Gold and platinum card holders enjoy valuable benefits and services such as emergency roadside assistance, prescription savings, extended warranty, local discounts and the ability to earn points that can be redeemed for numerous rewards, including electronics, household items, vacations or even a new car. Platinum card holders also have access to convenient short-term loans, buyers’ protection and exclusive rewards and vacation packages.
My Rewards provides marketing support and delivers or facilitates the card benefits, all without the institution paying My Rewards. Just the opposite, My Rewards writes a check to the financial institution, providing a substantial revenue share.
Mike Triggiano, EVP of Product Management for Velocity Solutions, explained the importance of providing options when pricing checking accounts. “For some, the right option might be the typical free checking account. For others, it might mean paying a small fee to receive additional benefits and services that are valuable to them. So if you’re offering a ‘one size fits all’ checking product, you’re missing out on potential revenue.” Triggiano continued, “You find many tiers in rewards programs in the airline, credit card and hotel industries. Consumers value the elevated status levels commonly associated with silver, gold, platinum or diamond memberships in those contexts.”
Velocity first implemented the program in late 2013 and has seen continuous increases across all program performance metrics, such as net income, checking account penetration, and account holder satisfaction. “The response to the program has been overwhelmingly positive, and we’re signing new clients continually,” said Mike Triggiano, “because an institution with 50,000 checking accounts can generate a substantial new revenue stream of $1 million or more per year.”
In support of the program, Velocity Solutions launched a new website, www.RepriceChecking.com, where financial institutions can learn more about the program and estimate potential revenue with an interactive revenue calculator.
About Velocity Solutions, Inc.
Founded in 1995 and managing nearly 15 million transaction accounts, Velocity Solutions® is the leading provider of revenue enhancement solutions to regional and community banks and credit unions. Velocity’s solutions are designed to drive new accounts, increase transactional activity in existing accounts, generate additional fee income, increase account holder retention and address regulatory scrutiny. For more information, please visit www.myvelocity.com.