Ed. note: This post first appeared on McGladrey’s website.

When determining which payments products and services to offer customers, banks and credit unions have more options than ever before. Financial institutions offer paper checks, debit cards, credit cards, online bill pay, money orders and any of several newer mobile applications and gadgets, just to name a few.

But how should banks and credit unions decipher the nuances of all of the options and make decisions about which payment options to offer their customers? Rather than simply "keeping up with the Joneses," financial institutions would be well served to think more holistically and strategically about their payment strategy. Here are the 4 Rs—and one very important D—to consider when creating a comprehensive payments strategy.

Relevancy. Before financial institutions can ensure that their payments options are relevant to their customers, they have to truly understand who their customers are. A smaller-market institution with an aging customer base may need to take a different approach from one that primarily serves high-net-worth individuals and small businesses. A brand focused on the underserved, who may not have access to the newest technologies, will differ from one striving to engage a younger market in new and innovative ways. The product portfolio banks and credit unions create and maintain should be dramatically different depending on customers' financial needs, lifestyles and preferences.

Revenue replacement. As interchange fees evolve, financial institutions will need to identify and implement ways to recover that lost revenue. They should ensure that they are optimizing revenues from their payment options. Studies show that Generation Y account holders use expedited bill pay more than any other age group. If financial institutions have a significant percentage of customers in that generation, they should be sure to price expedited bill pay appropriately.

Risk. Risk abounds in the payments space. There is security risk. With every new innovation, there is a new opportunity for fraudsters to infiltrate systems. There is regulatory risk. As regulators strive to craft rules and guidelines to make systems and data safer, banks and credit unions struggle to keep up with a complex and ever-changing set of compliance requirements. Finally, there is adoption risk. What if you invest the time, money and resources necessary to create a new payment solution, but your customers aren't interested? Careful analysis and planning can help financial institutions to understand, mitigate and avoid the unique risks faced in their markets.

Relationships. Consumers today show affinity toward certain groups or pastimes, and those affinities can drive buying decisions. Financial institutions should try to find ways to capitalize on these trends and create products that cater to that desire for a common bond—even if that bond lives in the virtual world. They should consider questions like whether customers would find a payment platform more compelling if they could join—or even create—groups of people with common interests. What about creating a partnership with merchants who have strong customer loyalty and would appreciate a payment solution that offers them relevant rebates or rewards? Some payment systems even give consumers the option to redirect rewards to charity or other causes they support. These are all ways to increase the value of products and loyalty to brands.

Data. Every transaction a customer executes through an organization offers new information about that customer—what they buy; when, where and how they buy it; how much it costs and what other purchases they make at the same time. The market for that data is relatively new and is still evolving, but banks and credit unions have a profound opportunity to plan their strategy around that data. They can find ways to monetize the data in a way that benefits them as well as their customers while avoiding what is possibly the most critical error of all—triggering customers' privacy concerns. They can also couple this wealth of purchasing data to understand and capitalize on the relationships concept discussed above. By using customer data, financial institutions may be able to help clients identify potential affinity groups of which they weren't even aware.

The payments space is complex and evolving. Financial institutions should consider concepts like these and craft a holistic payments strategy that is consistent with their brand, their mission and their overall strategic plan for the future.

Mary Beth Jameson is a director in McGladrey’s management consulting practice, where she focuses on strategic planning, project management, process improvement and change management for clients in a variety of industries, including several notable engagements in the payments and prepaid debit card space.