MasterCard has found that it doesn't take much to get consumers to use an enhanced automated teller machine card at the point of sale.

At the very least, a simple postcard urging cardholders to pull out their off-line debit cards to pay for goods and services does the trick.

What's more enticing, however, is a cash-back offer of $1, $2, or $5, based on the number of times a debit card is used at the checkout for purchases of $20 or more.

Interestingly, MasterCard learned after conducting a 45-day pilot using its "smart money" theme, that if banks offer more than $5 back, there isn't a significant jump in usage.

"You don't have to do a lot in terms of financial incentives to get consumers to use a card," said James Desrosier, vice president of marketing and product management for MasterCard's debit services group. "The less consumers have to do to activate the card, the more likely they are to use it."

Signet Bank, one of seven financial institutions that participated in MasterCard's pilot, put that knowledge to work recently when it relaunched its POS debit program under MasterCard's MasterMoney name.

Last month, the Richmond, Va.-based bank sent out 200,000 ATM cards to customers enhanced with the MasterCard logo and the MasterMoney name on the front, along with Signet's name.

At the same time, explained Brian Carrier, retail product development manager, the bank included a letter and brochure explaining how the card works and offering cardholders incentives to use it.

"The linchpin to it all is just the education piece," Mr. Carrier said. "The key difference is doing it when the card is mailed. It's important to have the card in hand."

When it converted its Visa Check program to MasterCard last month, Fifth Third Bank had the same luxury of sending out enhanced ATM cards and explaining how they can be used at the point of sale at the same time.

In fact, the Cincinnati-based bank sent customers a letter prior to reissuing its 72,000 Jeanie cards with the MasterCard logos, explained Henry W. Hobson III, senior vice president.

"The initial wave of issuance was to existing cardholders who were active users," he said. The bank plans to enhance a "substantial number" of its remaining 629,000 Jeanie ATM cards, he added.

Both banks are experimenting with how much information they give consumers, and when, plus what kind incentive they are offering. Signet is testing 1% of purchases, while Fifth Third is giving cardholders MasterValue coupons from MasterCard for 10% to 25% off goods purchased with a Jeanie card at the point of sale.

In its pilot conducted from the end of March to Mid-May, MasterCard found, "simple is best," said Arthur D. Kranzley, senior vice president and general manager for debit services at MasterCard.

The New York-based association created a cardholder activation and usage stimulation program for seven institutions: Signet, Shawmut Bank, Integra Bank, Union Bank, First Hawaiian Bank, Telco Community Credit Union, and Credit Union National Association.

In a 45-day direct mail program, 200,000 ATM cardholders who hadn't used their cards recently at the point of sale were given incentives to do so. The standard offer was $1 for one purchase for more than $20, $2 for two, and $5 for three or more.

If cardholders used the enhanced ATM cards three times or more, Mr. Desrosier said, it was likely they would become consistent users.

MasterCard experimented with how the incentive was delivered to the cardholder, the level of the incentive, how it was tracked, and how it was redeemed.

Using a full direct mail package to stimulate inactive cardholders with the standard offer, one institution got a 22% response rate with an average ticket of $70. A lower-cost self-mailer achieved responses up to 14%, MasterCard said.

"Even when we increased the incentive by 100%," Mr. Desrosier said, "it did not increase the response rate."

"This is a significant business case for banks in offering debit," Mr. Kranzley added.

In calculating the cost of the marketing program, MasterCard found that in six months the bank can pay for the cost of the direct mail program and in seven it can pay for a self-mailer program. By 12 months, MasterCard estimates the bank can get a 100% return.

"If you follow the steps that were recommended," Mr. Desrosier said, "you fully enhance the ATM card, you position POS as a single function and educate [consumers] about using their ATM card to shop, combined with some vary basic direct mail tools and not-too-high value incentives, that you can get a high percentage of people to activate and the program can pay back very quickly."

Signet is picking up where the pilot left off and testing other variables through the end of the year, Mr. Carrier said. Among the questions the bank are: Do you have to reward people or is education enough? How many times do you have to keep educating cardholders? How much should cardholders be rewarded?

Meanwhile, it has been running television and radio advertisements about its new POS debit program in the Richmond and Baltimore region. It too will use the MasterValues program to boost usage and plans to introduce new features to its cards next year.

Fifth Third switched to MasterCard for its marketing support, Mr. Hobson said. "We found with MasterCard we could enjoy interesting promotions and incentives to put this to the marketplace."

Visa U.S.A. acknowledges the Fifth Third defection by putting the debit picture in context. Visa has 16.5 million cards compared to MasterCard's four million, and it has had a number of MasterCard converts this year, including First Financial Bank of Stevens Point, Wis.

"If you look at our track record," said Una Somerville, vice president, Visa has been consistent in an integrated strategy, whereas MasterCard switched gears this year to focus on its off-line product instead of Maestro.

"Traditionally, MasterCard has followed our lead," Ms. Somerville pointed out. "At this point, they are trying to make up market share."

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