The Challenge
40% of inactive cardholders eventually switch to another provider.
In a market flooded with payment options, issuers must act fast to secure and maintain top-of-wallet status. Consumers today have more choices than ever – credit and debit cards, digital wallets, APMs, BNPL services, and contactless payments. New payment technologies continuously reshape consumer preferences, making loyalty harder to sustain.
Half of U.S. consumers experimented with a new payment method last year. 16 percent made a full switch. Issuers now face mounting pressure from neobanks and fintechs, which attract customers with lower fees, frictionless digital experiences, and tailored incentives.
Losing top-of-wallet status often results in losing the customer entirely. Visa reports that 40% of inactive cardholders ultimately switch banks or payment providers. Additionally, 55% of consumers abandon purchases after a poor payment experience. To stay ahead, issuers must ensure seamless transactions, personalized engagement, and proactive decline prevention to maintain customer loyalty.
Three Key factors for Securing Top-of-Wallet Status
To maintain top-of-wallet status, issuers should focus on three essential factors:
- Maximizing Early Engagement
The first 90 days of card ownership set the foundation for long-term usage. Frequent engagement during this period can increase a cardholder’s long-term value up to three times, according to McKinsey. Successful issuers leverage onboarding rewards, personalized notifications, and early spending incentives to reinforce habitual card use and ensure their card becomes the preferred choice. Avoiding as many payment declines during this period as possible is key. - Leveraging Transaction Data for a Competitive Edge
Card issuers have a unique advantage over competitors. They can analyze and act on deep transaction data to understand customer behavior better. This allows them to predict spending patterns, tailor dynamic rewards, and enhance fraud prevention strategies. Issuers can use real-time insights to customize offers, improve security, and build deeper customer relationships, reinforcing long-term card usage. - Eliminating Friction and Preventing Declined Transactions
A single declined transaction can break customer trust and push them toward alternative payment methods. Smooth, reliable transactions are key to retaining top-of-wallet status. Preventing unnecessary declines, optimizing approval strategies, and maintaining transaction continuity contribute to a superior customer experience and stronger loyalty. Consumers expect frictionless payments – issuers must deliver.
How Kipp Helps Card Issuers Strengthen Their Position
Kipp helps issuers prevent unnecessary NSF (non-sufficient funds) declines while maintaining effective and dynamic risk evaluation. By integrating directly with issuers in real time, Kipp provides greater control over transactions that would otherwise be declined.
When a transaction is at risk of being declined due to insufficient funds or credit limits, the issuer sends an API call to Kipp. Kipp then checks whether the merchant is willing to pay a percentage premium to allow the issuer to approve the transaction instead of rejecting it.
This proactive approach minimizes declined transactions, enhances the customer experience, and ensures issuers retain their top-of-wallet position. By preventing transaction failures in real time, Kipp strengthens customer trust and secures ongoing card usage.
