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Case Study - A Diverse Basket and a Better Night’s Sleep

How One Midwest Financial Institution Avoided Leaving Money on the Table

If you ask financial institution executives what keeps them up at night, you’ll likely get an earful. It seems that fewer are getting a good night’s sleep these days.

Banks and credit unions are dealing with intense competitive and regulatory pressures. They also are concerned about the upheaval caused by fintechs. These threats – and the fact that interchange revenue from debit programs is under pressure – are nibbling away at their bottom lines. Meanwhile, the pace of technology disruption can be paralyzing. Without a crystal ball to foresee winners and losers, waiting often seems like the responsible thing to do.

That’s why, now more than ever, banks and credit unions need partners that can help them get the most revenue out of their debit program.

This is a case study about the experiences of a Midwest community bank. It’s a bank that has served their community for well over a century. The institution has close to $1 billion in assets, nearly a dozen branches and about 120 employees. They’ve been a PULSE participant for 15 years.

The bank recently did a core processor conversion. During the conversion, the bank, along with an outside consultant, took a look at the EFT debit network the processor owned. On the surface, it might have seemed like a good idea. It certainly would have reduced the number of vendors. What they quickly found however, was that it was not in their best interest.

Valuable Perspective

What might seem like a good idea at first may not be the best option. It often makes sense to look at varying combinations of "front-of-card” debit networks (Visa, Mastercard, Discover) and "back-of-card” EFT debit networks (PULSE, STAR, NYCE, etc.) as ways to gain interchange.

A financial institution only has control over which networks it joins. After that, merchants decide how transactions are routed. Merchants’ decisions greatly affect the issuer’s interchange income. That’s why it’s more important than ever for issuers to choose front-of-card and back-of-card networks wisely.

The issuer and consultant engaged PULSE and began to look at potential options. One option included the processor’s EFT debit network. Another allowed for PULSE to continue serving as the EFT debit network. A third option included changing their front-of-card network from Visa to Discover® Debit and dropping PULSE as the EFT debit network. This made it possible for the bank to examine the impact of many combinations and make a more informed decision.

For this bank, staying with Visa and PULSE as the EFT debit network made more sense, especially considering the amount of resources that were earmarked for the impending core conversion.

Hands-on Expertise

"A major reason we stayed with PULSE was the hands-on expertise they offered during the vendor selection process,” said the bank’s Senior Vice President and Chief Operations Officer. "PULSE is willing to help on any network-related matters, even when it does not benefit them. They know debit.”

PULSE has more than 35 years of singular focus on debit, something this issuer finds valuable.

"The debit knowledge and specialization PULSE brought outweighed the benefits we would have received by putting all our eggs in one basket with our processor,” said the SVP, COO. "With PULSE, I gain variability in expertise. PULSE is better suited to answer debit-specific questions and help us make better choices.”

Network-level Perspective The financial institution also chose PULSE to add another layer to their fraud-mitigation strategy.

"What keeps me up at night is fraud,” said the bank’s Assistant Vice President, Deposit Operations Officer, who leads their debit program. "It's ever-changing, and managing fraud without interrupting our customers’ ability to use their cards is a top priority. We're pleased with how DebitProtect® provides a network-level view that supplements our other services.”

With DebitProtect, issuers get the benefit of transaction data PULSE sees across its entire network. This pairs well with the fraud-mitigation services issuers typically receive from their processors. This approach allows issuers to draw on fraud data from both a network and processor perspective, enabling them to make more-informed decisions.

Dedication to Service

"There’s a financial component to every decision we make, but we also understand the importance of customer service,” said the SVP, COO. "From that perspective, the PULSE team was at a higher level than the others we considered. And, they remain responsive after a sale.”

PULSE’s intense focus on their clients’ needs is embedded in the company’s culture. PULSE uses an annual client survey to keep up with clients’ priorities, pain points and needs. When financial institution executives were asked what words best describe PULSE, the most common responses were "reliable,” "innovative,” "partner” and "helpful.”

"I know our business is going to look different in the future; I just don't know how it's going to look,” said the SVP, COO. "PULSE helps us understand what the future holds, and I am confident they’ll help us prepare.”

"What I expect out of our partnership with PULSE is pretty simple – we need to know what we don’t know. If there are revenue enhancements we should be looking at, we need to know that. If there are customer-engagement opportunities available, we need to know that.”


The bank’s debit program is thriving. From 2012 to 2017, their debit transaction volume grew an average of 15.8 percent per year, compared to the average 5.8 percent reported by issuers in PULSE’s annual Debit Issuer Study. Over the same period, their transaction dollar volume increased by 120 percent and their net debit card interchange income by 127 percent. These results were achieved, in part, through PULSE’s help with program optimization and fraud mitigation.

"When I think of a partnership, I think of the upper echelon of vendors where we work together to make each other better," said the SVP/COO. "I believe that PULSE thinks as much or more about our success as their own, and that's how I hope our customers feel about us.”