Magazine article American Banker

Kiosks Instead of Direct Mail?

Magazine article American Banker

Kiosks Instead of Direct Mail?

Article excerpt

Issuers should look at kiosks that instantly dispense credit cards as an alternative to acquiring customers through the saturated direct-mail channel, a consultant said.

Retailers such as Ikea Systems BV have experimented with such kiosks to sell private-label cards, but Zoltan Ambrus, an associate at the New York consultancy FischerJordan LLC, sees a broader application of the concept.

He suggested that issuers install the kiosks in areas with high foot traffic to market affinity cards. For example, they could be placed in airports to sell airline rewards cards, eliminating the need for airline employees to take the applications, or in department stores to issue general-purpose cards cobranded with the retailer.

Strategically placed kiosks would help issuers land consumers who have the urge to splurge or the few who "fell through the cracks" and were not solicited by mail, Mr. Ambrus said.

At the kiosks, consumers would apply by entering their information into a machine or swiping a credit card (or, if it has a magnetic stripe, a driver's license). The kiosk would electronically check the applicant's FICO score and, if approved, would issue a temporary card on the spot.

Each kiosk would cost $5,000 to $12,000 depending on the type and number of orders, and occupancy rent would run between $500 and $1,000 a month. If each machine yields one or two new customers a day, it would pay for itself in two years, Mr. Ambrus said. "From our calculation, it's very feasible."

Neet Shah, a managing partner at FischerJordan, said the firm has pitched that idea to a few banks, including a "major issuer" he would not name. …

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