Mastercard and ICBA Team to Strengthen Community Bank Card Programs

Mastercard has teamed with ICBA Payments, payments subsidiary of the Independent Community Bankers of America.

The alliance is designed to help community banks modernize their card programs and offer enhanced payment services, according to a Monday (March 17) news release.

“Today, we’re not only upgrading payments but also investing in the future of our local communities,” ICBA Payments CEO Jacob Eisen said in the release.

“By partnering with Mastercard, we’re equipping our member banks with innovative, secure, and cost-effective solutions that empower them to support and grow the neighborhoods they serve. Together, we are paving the way for stronger local economies and enduring customer relationships.”

According to the release, Mastercard will handle all cardholder communication and marketing, providing “custom-curated joint marketing assets” to help improve cardholder activity for ICBA Payments’ member banks.

For its part, ICBA will upgrade its sponsored card programs to Mastercard and “feature contactless plastics, tokenization to digital wallets, and industry standard 8-digit BINs and business BIN optimization,” the release added.

“At Mastercard, we believe that the heart of economic progress lies in the strength of local communities,” Marie Elizabeth Aloisi, executive vice president, U.S. Market Development, Mastercard, said in the release. “This is where we share like-minded values with ICBA Payments, working to bring more people and businesses into the digital economy.”

The partnership comes at a time when small to medium-sized businesses (SMBs) are increasingly turning to community banks and credit unions (CUs).

Research by PYMNTS Intelligence shows that 23% of SMBs choose local banks or CUs, compared to 58% who went with larger national banks. This trend shifts, however, for rural and lower-revenue businesses. Rural SMBs, for example, were more likely to choose local institutions (49%), with just a quarter of these businesses banking with national banks.

As PYMNTS wrote earlier this month, these financial institutions are making the switch for greater personalized service and local engagement, but find that community banks and credit unions’ digital offerings fall short compared to national banks.

Many SMBs report higher satisfaction with features like fraud prevention and customer service from smaller FIs, yet the digital experience remains an area of concern.

“Local banks’ digital platforms often do not meet the same standards as those of larger banks, leaving SMBs less satisfied with online banking services,” PYMNTS wrote. “To compete more effectively, community banks and CUs will need to enhance their digital platforms to match the expectations of SMBs, especially those with higher revenue or growing digital needs.”