TransUnion and Edgar, Dunn Launch Revolver Model

"The unique nature of the PaymentDynamics product suite is that it is based directly on consumer preference, which can provide unique insights versus traditional usage models that rely on past behavior with a single issuer," said Mary Ann Blotzer, senior consultant for TransUnion. "Financial institutions can effectively use the Revolver Model in active credit card portfolio management and in cross selling additional products to specific consumer segments that usage-based models might miss."

By understanding consumer balances management preferences and credit card use, marketing managers at financial institutions can improve product marketing efforts by segmenting prospects and customers and providing relevant offers and messages to each group. For example, high revolvers might be interested in services such as balance transfers, or low APR offers, while non revolvers are more likely to be interested in special rewards or features.

"The reality for financial institutions is that consumers have an increasing number of payment options available to them and understanding their preferences is key in creating product offers, promotions and messages that resonate with them," said Beth Costa, director at Edgar, Dunn & Company. "The Revolver Model can help financial institutions address these issues by providing audience segmentation and communication strategies that can improve customer acquisition, cross-sell and retention efforts."

The Revolver Model joins the Payment Preference Model as part of the PaymentDynamics Suite which was introduced in July 2007. The suite is designed to allow retail banks, financial services companies, credit card issuers, and card associations to maximize and prioritize direct product offer strategies across the full payment spectrum of cash, check, debit cards and credit cards.

The PaymentDynamics 2007 Preferred Payments Study jointly conducted by TransUnion and Edgar, Dunn & Company, is the first such study to combine consumer credit risk characteristics with consumers' choices of all payment options. This study helps payment providers better understand how consumers prefer to pay for goods and services, and how consumers' payment behaviors and preferences shift based on their credit risk profiles.