MasterCard Introduces Product Graduation for US Cardholders
MasterCard has announced the launch of MasterCard Product Graduation in the United States - a new program that enables cardholders to keep the same account number when switching between various card programs offered by an issuer, thereby avoiding the need for the cardholder to update recurring payment accounts, etc.
The program does not support a cardholder moving an account between card issuers and keeping the same account number. MasterCard calls Product Graduation a "patent-pending solution that offers more flexibility for cardholders, merchants, and the customer financial institutions that manage accounts. Retaining account numbers will allow cardholders to maintain their recurring bill payments, online shopping profiles, and other automatic payment relationships, providing uninterrupted service for both the consumer and merchant. With this solution, fewer payments will be disrupted when a cardholder switches to a new card program."
MasterCard Product Graduation is also geared towards helping issuers manage the cardholder lifecycle, making it possible for improved account migration within selected consumer and within selected commercial card programs. Customer financial institutions can now address the growing number of cardholders who would like to upgrade or switch to a more relevant card program without having to worry about disruptions or changing account number information.
“Our issuers want the ability to offer their cardholders the most relevant, attractive products that are suited to their specific needs and behaviors,” said Wendy Murdock, Chief Product Officer, Global Product Group, for MasterCard Worldwide. “But until now, moving a cardholder to a new, enhanced product would have meant issuing a new 16-digit account number, potentially disrupting the cardholder’s payment relationships. Product Graduation helps our issuers solve this dilemma by reducing inconvenience to cardholders. Merchants stand to benefit too, as recurring payment relationships they have with their customers can remain intact and uninterrupted.”
In addition, Product Graduation does not mandate any new requirements for acquirers or merchants. Acquirers are already able to receive the required information, announced in October 2006. Also, merchants do not need to worry about installation requirements or making any changes to their point-of-sale systems.
To ensure the cardholder value proposition is strong, MasterCard developed this functionality with a focus on the operations of issuers, acquirers and merchants and the impact of this capability on the cardholder experience.
“Our goal is to design our products and technology in a way that delivers optimal value, control and flexibility to our customer financial institutions and other partners,” said Murdock. “Product Graduation is the most recent example of how MasterCard delivers targeted programs that are innovative and customizable for individual banks.”
I hope Citi takes advantage of this MasterCard offering. They are apparently switching Citi Dividend MasterCard holders from Platinum level to World level MasterCard’s and some are stating that their notification letter says or implies they will receive a new account numbers. And therefore these people have called Citi to opt to reject the switch as it would be changing all their auto-pay / auto-bill info.
Do Visa or Amex offer this “Product Graduation” product? – No – Only MasterCard does – Priceless.
Posted by: N. S. | June 15, 2007 at 10:58 AM
I believe Visa 'plans' to offer a similar service beginning later this year, though it will require changes to most processing platforms and significantly impact merchants and acquirers to support the change.
Great work - MasterCard
Ability to roll out a feature of benefit to all parties in the payments chain efficiently and with minimal impact - Priceless.
Posted by: T.R. | June 18, 2007 at 02:34 PM
Is anyone aware of any U.S. issuers who are considering this service?
Posted by: Mike McCormack | June 29, 2007 at 12:41 PM