Additional Ideas:standardplayer wrote: ↑Thu May 30, 2019 5:53 pmRough Idea for Credit/Debit/Charge Cards:David wrote: ↑Thu May 30, 2019 3:59 pmInteresting concepts. Could you provide more details as to how you envision these to be implemented?Bank Design Suggestions:
-Credit/Debit/Charge Card Brand with Interchange Fee Revenue (Earn fee revenue off every retail transaction that customers use your card to purchase)
-...
• Section of Bank HQ: (Edit: or Completely Separate Company HQ)
o Allows you to create and name a Card Brand (e.g. Visa, MasterCard, American Express)
o Set Card Fee 1.5%-2.5% and Rewards Target 1%-2% of Purchases
o Set an Annual Fee $0-$150/year
o Set an Advertising Budget and See Brand Rating
o See Market Share (Number of Cardholders, Market Share Graph or Pie Chart, etc.)
• Retail Transactions/Fee Example:
o Retail Sales $15 Billion:
-Cards 80% $12 Billion
-Cash 20% $3 Billion
o Market for Card Fees: 1.5%-2.5% Fee x $12 Billion = $180-$300 Million in Fees
o Annual Fees: Population 5 Million
-Upper Class/Luxury Population 1.5 Million x $100-$150/year = $150-$225 Million
-Regular Population 3.5 Million x $25-$50/Year = $87.5-$175 Million
• Market Share/Competition:
o Customers:
-Upper Class/Luxury Population Weighs Brand Recognition Highly willing to pay Large Annual Fee to be part of Exclusive Club (20%-35% of Transactions) (like American Express Premium Cards)
-Regular Population Weighs Rewards Highly Willing to Pay Small Annual Fee (65%-80% of Transactions) (like Visa or other Mass Market Cards)
o Card Selection Effected by:
-Brand Recognition
-Reward Program Competitiveness
-Cost of Annual Fee
• Revenue and Expenses:
o Revenue:
-1.5%-2.5% of Retail Transactions by Customers
-Annual Fee $0-$150/year per Cardholder ($25-$50/Mass Market, $100-$150/Luxury Card)
o Expenses:
-Rewards of 1%-2% Target for Cash Back or Equivalent Points where 1/3 of people Don't Redeem Rewards so effectively 0.67%-1.34% Expense
-Advertising
-Infrastructure and or Operating Costs: Transaction Processing Data Cost, etc.
• Banks could use Credit Card Loans to generate Higher Interest on a portion of their Assets
What do you Think? Any Other Practical Ideas to Implement to make it realistic, challenging, and/or fun?