A Card Marketplace for Comparison-Shoppers

A company in California has developed a new distribution channel for marketing credit cards that allows consumers to come to one place to comparison-shop.

GetSmart, as the marketplace is known, gives consumers the option of calling a toll-free number or accessing an Internet site for a free scan of offerings from the top 100 card issuers.

The marketplace concept it entails has been adopted by other industries in recent years: Charles Schwab & Co.'s OneSource mutual fund supermarket; Auto-By-Tel's World Wide Web site that matches prospective new car buyers with local car dealers; and Intuit Inc.'s InsureMarket, a Web site that allows consumers to compare and buy insurance products.

GetSmart marks a departure for an industry that has been slow to wean itself from blanketing the country with direct- mail offers, which typically get 1% to 3% response rates.

"Consumers do have a strong appetite to see all their options in one place and to be able to choose those options based on their purchasing priorities," said Bill Fisher, president and chief executive of BFC, the San Mateo, Calif., company that created GetSmart.

Once consumers select their priorities, the process takes a matter of seconds. Consumers can pick from rewards programs, rates, fees, rapid approval time, affinity relationships, branding, and type of card. For example, in one search a low-fee, low-rate Visa Gold card might be requested. In another, an Optima card that offers airline miles might be chosen.

GetSmart tells consumers through telemarketers and on-line messages that the company is not affiliated with any card issuer, so that all searches are impartial. Also, consumers are told that the offers in the data base are standard, not the best rates provided by the issuers. Information from publicly available data and the card companies is updated monthly.

If consumers find a card to their liking, they can choose to apply by phone, fax, mail, or through the Internet. Card companies can specify the channel they prefer, as well.

The issuer pays BFC a fee only when an applicant has been approved to open an account. The fee will be somewhat lower than the $60 to $100 issuers pay to acquire an account, Mr. Fisher said. "If you choose a card company, there's virtually a 100% chance you will activate the card once you get it in your hands," he added.

Scott Cook, Intuit's president, said financial institutions can attract new customers using a marketplace distribution channel with its lower cost.

"Web sites are lousy for selling prospects because they never go there," he said. "You have to go where the customers are to sell them."

Consumers will want to go to spaces such as Quicken InsureMarket, he said, because they can find the best deals. There is no waste in market spaces - "people who want to go there are ready to buy now."

Mr. Fisher said card issuers should look at GetSmart as a distribution channel that complements others. One advantage to this route, BFC said, is the trend data it will make available to issuers regarding demographics and preferences. It will not offer information on individuals.

"The biggest value we can offer to card issuers over time is the data," he said, because this type of information enables the issuer to develop new products to match changing consumer appetites.

Mr. Fisher, a former executive vice president at Wells Fargo & Co., started the privately-held BFC along with senior executives from Wells, Levi Strauss & Co., and current partners of the Mitchell Madison Group.

BFC began compiling the data base six weeks ago and last week kicked off a pilot, leading up to a national launch in January. At that time, the company will begin advertising GetSmart with ads on radio, billboards, and in print.

Mr. Fisher said he is waiting to see if other marketplaces develop for credit cards. "Where we come out is based on our background," he said. "We'll have to outexecute the competition, now and always."

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