Credit Cards in British Columbia - On the Cusp of Change
Presented by Nicolas Krischanowsky, Director Ministry of Finance, Provincial
Treasury Banking/Cash Management Branch, Government of British Columbia
Overview
- BC’s credit card business today
- Cost pressures - are we getting our money’s worth?
- Moving forward - strategic decisions
Here are the Numbers
- Public money collected via credit card (annual volumes)
- $6m via the Internet
- $16m over the telephone
- $729m over the counter
- Credit card programs as a payment tool (annual volumes)
- $50m - Purchase Card Program
- $22m - Travel Card Program
Escalating Costs to Government
- Trend
- Industry-wide move to a new pricing model
- Acquirers more rigid on how they will deliver services
- Payment Card Industry Data Security Standards
- Expanded card usage
Impact
- Cost escalation/budget uncertainty
- More difficult business relationships
- More costly and time-consuming for the province (security audits)
- Increased demand/ increased cost
Do We Stay, Fold or Draw?
- Credit cards are expensive
- Potential cost increase of $18 to 45 million per year
- MDR expensive in relation to other payment methods
- Cost exposure is open-ended
- Pricing models change
- Increased use of credit cards equals increased costs to government
At the Point of Hard Choices
Put simply:
- "Fund direct government services or fund transaction convenience?"
Staying in the Game
Alternatives:
- Consider other payment options
- Refusal of all credit cards
Acquirers Require New Approaches
- Protect customer relationships
- Recognize that government’s credit card business is cost sensitive
- Acknowledge that government has a different risk profile
Contact Information
- Nicholas Krischanowsky
Director, Banking/Cash Management Branch
Ministry of Finance, Provincial Treasury
250 387-7105
Nick.Krischanowsky@gov.bc.ca
Thank you.
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