Magazine article American Banker

New Frontiers in Cash Management Pricing

Magazine article American Banker

New Frontiers in Cash Management Pricing

Article excerpt

We who manage noncredit services at banks are being asked to generate a return on the investments required to stay competitive. In the pricing arena you are seeing the following actions:

* Banks sometimes appear to be pricing anything that moves, or looks like it might move. While that is, in fact, a bit of exaggeration, some of you can see a kernel of truth in it.

* You are less and less willing to pay for redundant information, such as paper and telex advices on top of electronic account information.

* As competition between banks increases, electronic banking services are key in maintaining current customers and attracting new customers.

* Banks are realizing that the incremental cost of supplying additional electronic information to new users is relatively low.

In the near future we are planning to institute a pricing strategy reflecting these realities. soon the basis for charging will change; prices will vary according to:

* What you get.

* How much you get.

* When you get it.

* How you get it.

That means we will charge on a transaction and balance-reported basis. You will pay only for the information you get, but you will pay for everything you use. So, when it comes to information you will have to draw the line between "Need To Know" and "Nice To Know."

We will charge according to communications media. The more efficient communications users will pay less. The choice is yours.

We will charge according to the timeliness of the information. …

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