People's Bank of Connecticut Beats the Drum for Debit Cards
Pesek, William, Jr., American Banker
Some community banks celebrate anniversaries with parades and town picnics.
But People's Bank of Connecticut did things a bit differently when it kicked off its 150th anniversary. It decided to play up its status as the first bank to process a national on-line debit transaction.
Last August, the 2,300-employee bank helped officially launch MasterCard International's Maestro debit network when one of its executives bought gas with an automated teller machine debit card at a service station in Los Angeles.
The transaction, processed 3,000 miles away in People's headquarters in Bridgeport, won the 150-year-old institution place in banking history.
Never one to follow the crowd, People's thought it was a fitting way to commemorate its long history and at the same time solidify its image as a bank on the cutting edge of new technologies.
But now that the parties are over and all the streamers have been taken down, the $5.8 billion-asset bank faces the tall task of marketing its new electronic funds transfer programs.
And as executives like David E.A. Carson are finding, that's the real challenge for bankers in the 1990s.
"Keeping customers up to date with existing and new products is our big focus right now," said Mr. Carson, president and chief executive. "Getting them comfortable with debit cards is at the top of the list."
The task begins with letting customers know that debit cards are out there.
Figures supplied by The Nilson Report, an industry newsletter in Santa Monica, Calif., show that debit cards accounted for only four of every 1,000 consumer payment transactions in 1992.
In Connecticut, People's primary market, only 5% of supermarkets and 10% of gas stations have signed up with Maestro, said Mr. Carson.
To pitch its debit program, the bank has incorporated a mix of ad campaigns and employee training programs.
So far, People's has experimented with radio shows, video advertisements, billboards, posters, direct mailers, and discount coupons.
The bank's role in the first Maestro transaction has evolved into a powerful piece of marketing.
It won People's Bank coverage on national and regional television networks. Two Los Angeles-based and one national television news crew showed up to film the event. which became the subject of evening news feature stories for all three.
The bank's marketing team turned the coverage into a video that it now distributes to merchants.
But that campaign really took off when the video was worked into an in-flight technology program shown on more than 17,000 American Airlines flights worldwide in 1992.
People's Bank's growing success with its debit card program can also be attributed to marketing support from the Yankee 24 ATM network, Maestro, and National Data Corp., an outside card processing firm in Atlanta.
The bank gets help from its regional ATM network, Yankee 24, which is currently conducting its own aggressive marketing crusade. That benefits People's Bank because Yankee 24 provides the bank with personalized marketing materials such as pamphlets and posters. In addition, Yankee 24 actively solicits new merchants.
"More merchants is of benefit to everyone, and Yankee 24 is out there getting them in the door," Mr. Carson said.
People's Bank contracted with NDC to recruit new merchants so that it could focus on getting its own customers to use the debit cards.
Also, reaching an agreement with NDC gave People's Bank instant access to NDC's existing customer base, which includes most of the supermarkets, restaurants, and gas stations offering debit capability in New England.
"Turning to an outside firm has taken a lot of strain off," Mr. Carson said. "As a result we can devote our efforts to getting customers sold on making purchases with debit cards and increasing the overall volume of usage. …