Program Management is no easy task

During my days as a program manager, It was such a challenge to drill down the performance of our card portfolio because of the inadequate reporting provided by our processor. The relationship between accounts on file, active accounts, collected fees, and pass through costs from the associations and member bank were a constant moving target. Without the help of external systems and applications, it is very possible for a program manager to sell his way straight into the ground. Managing costs and cash positions are obviously a concern of any business, but in the world of prepaid card issuing, a small company will experience similar pressures of a large, multi-national company because the speed at which individual cost and revenue units are generated.

To give you an idea of what I mean, here's are some examples of the variables a program manager must keep track of:

1. Monthly Account on File fees - How the program manager's issuing bank and processor define an "Account on File"  may vary. The bank/processor may say any account created and placed on our system is billable regardless if there is no activity. Or, say if the card has generated a transaction in a 30 day period it will be considered a billable account on file. The ideal situation would be if both bank and processor agreed on how to classify this fee category, but most don't. So here we have two sets of fees and two methods of billing.
2. Billed vs. Collected Monthly Account on File fees - New program managers make the huge mistake of expecting all transactional and pass through costs to be covered by cardholder fees. Why not, "if I'm charging $4.95 per card per month I have nothing to worry about right?" Oh boy are you in for a surprise. Cardholders adapt well and they will learn the billing cycles. Check your transaction history reports and you'll start to see heavy ATM withdrawals right before your scheduled 3:00 AM monthly fee billing run.
3. POS/ATM Authorization fees - This item could go either way. The last two processors I worked with did not include the cardholder fee in the authorization request. A batch "end of day" process was run to collect cardholder fees, and just like the monthly account on file fee, if the money was withdrawn before the account is pinged, you're out of luck. As a side note, OLS.Switch does support the real-time inclusion of POS and ATM cardholder fees.
4. Account Creation fees - This fee category is one to watch closely. If your processor charges an Account Creation fee, you don't want to go full blast on a sales campaign without a solid strategy to promote activation and utilization. There is a huge difference between shipped and active cards. An even bigger difference between Active and profitable cards.
5. Attrition - In my previous post titled "Reaching the unbanked market with prepaid products" I mention the importance of live cardholder support. If left to the wind this number could go through roof.

In the world of prepaid card issuing the program manager is where product development and consumer need meet. The program manager acts as the conduit between bank, transaction delivery and end user, and in many ways, is the most involved process as it physically must interact and be accountable to all parties. Not an easy task.