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STAMFORD, Conn. — Four years ago next month, GE’s American Consumer Finance business established Retail Consumer Finance as a separate business unit and appointed Margaret Keane as its president and chief executive officer.
Working with all four major credit card providers, RCF develops and manages a variety of customized credit services for its retail customers, and recently added a “Dual Card” arrangement with Dillard’s and American Express, and a PayPass program with Meijer Stores and MasterCard.
RCF works to “leverage the loyalty to the store’s brand and drive retail sales,” according to Keane, a 10-year veteran of GE who began her career at Citicorp. Typical benefits to the consumer include financial rewards, deferred payments and complimentary services such as gift wrapping. WWD recently caught up with Keane for a progress report.
WWD: How is the division of labor handled in your new program with Dillard’s and American Express?
Margaret Keane: GE Consumer Finance is responsible for issuing the Dillard’s American Express cards, managing the customer relationship and providing all customer service, billing and credit management. Just as with any other card accepted on a network, American Express provides network services such as carrying transactions from merchants to our system for authorization.
WWD: Your relationship with American Express is new. Do you have similar ones with MasterCard, Visa and/or Discover?
M.K.: Yes, we can offer our retail partners cards on any of the four payment networks, and a few examples include our J.C. Penney MasterCard and the Wal-Mart Discover Card. We have other Dual Card products with Sam’s Club and Brooks Bros.
WWD: Has the divestiture of numerous in-house retail credit operations made your services particularly desirable now?
M.K.: Yes. Retailers are realizing tangible benefits from having credit card companies who are expert in banking and credit card operations and regulation handling their credit card programs, allowing the retailers to focus exclusively on sales. We couple deep expertise in the credit card business with long-standing experience in the retail sector. We can understand what our clients want in their relationships with the customer through research and analysis, and we deliver the customized programs to meet the shopper’s needs.
WWD: With consumer credit running at such a high level, how are delinquencies running?
M.K.: Actually, our delinquencies are holding up very well. While consumer debt is high, the consumer is still very strong. When we do have delinquencies, we actively manage delinquent accounts that have a high likelihood to pay. In addition, our collectors are trained to be more understanding in offering settlements and creative payment terms to delinquent customers.
WWD: What are some examples of general or specific programs spearheaded by GE RCF? Which are proprietary?
M.K.: All of our programs are proprietary and customized for the client. We spend time understanding the retail brand, what it stands for, taking time to learn about the customer experience and, in particular, what are some of the difficult areas. Then we structure a program around solving these needs. For example, we conducted consumer research with a recently acquired portfolio and learned that a redesigned credit card was more likely to be used by the customer.
A second example is introducing technology to provide instant credit and faster credit approval for shoppers at the point of sale, which is where the majority of new accounts are created with our retail partners. Simply swiping the applicant’s driver’s license at a self-service kiosk and verifying some of the applicant’s personal information can finalize the application in seconds. The kiosks print out a temporary pass that can be used immediately at the store. We are currently piloting this in select stores with three major retail clients.
WWD: What’s GE’s sense of where the retail market is heading? How will recent consolidation affect your business?
M.K.: Many in-house retail credit operations have been outsourced, meaning there will be fewer big acquisitions available. Future growth in our business will come more from helping our retail partners increase customer loyalty.