Why increasing customer lifetime value should be top priority for issuers

Competition among card issuers is only getting more intense. Innovation in the payments industry has turned into a race for issuers to deliver the most enticing and valuable features and benefits — making it harder and more expensive for them to keep a competitive edge.  

For an issuer to stay competitive today, it has to offer the best digital banking experience, whether that’s making subscriptions easier or providing offers within its digital banking app. This all contributes to customers’ satisfaction and their lifetime value (LTV) to the issuer. 

LTV — how much total monetary value a customer creates over the course of their relationship with a bank — is a valuable metric. It helps issuers gauge the “stickiness” of their relationships: How much are they spending to acquire customers? How well are they retaining them and growing revenue by offering each customer multiple services?  

With customer acquisition costs on the rise, maximizing LTV remains one of issuers’ top priorities. Those that want to improve LTV need to focus on offering services and experiences that help deepen engagement and make their customers’ lives easier. This will not only increase per-customer profitability but also customer retention — because the more products a customer has, the more likely they are to remain loyal to that issuer and keep using their card. 

It’s critical to understand what today’s cardholders want and expect from their issuer relationships while taking steps to reduce costs. Issuers also need to find ways to reduce customer friction — like a card needlessly declined at checkout — to gain “top-of-wallet” status. 

If customers experience friction or have their card declined unnecessarily, they are less likely to use that card in the future. It’s incredibly important to make sure their card experience is simple and frictionless to help ensure they keep that card top of wallet.

Solutions that notify merchants immediately when a customer disputes a charge allow them to stop and refund an order — avoiding the need for a chargeback. This can improve cardholder authorization rates by ensuring only true fraud-related disputes get coded as fraud and reducing false declines at checkout that may discourage cardholders from using their cards in the future.

With more transactions happening digitally than ever, transaction confusion has become a more common reason for disputes and chargebacks — which are costly to issuers and frustrating to customers. 

Providing more insight into purchase details, like a clear merchant name and logo or an itemized digital receipt, can help reduce transaction confusion. Having this purchase information at their fingertips can significantly reduce the risk that consumers will dispute legitimate, non-fraudulent transactions because they simply do not recognize them.  

Case in point: 67% of consumers say they would dispute fewer transactions if more details were available in their banking apps, according to our 2026 research with Datos Insights. 

Offering new and innovative banking features, especially in digital channels, helps create a more engaging experience for cardholders.  

For example, consumers often find it hard to know where or how to pause or cancel their subscriptions. By offering them subscription control functionality through their banking app, issuers can provide a service that delivers a valuable and differentiated customer experience. In fact, around two in three consumers say they would be more likely to sign up for a subscription with banking app controls in place. 

Another opportunity for creating a positive customer experience: delivering personalized offers and reward points from merchants directly in the banking app. By bringing offers into their banking apps — a channel consumers already use often — issuers can offer a more relevant, connected experience. Around one third of consumers say this feature would make them more likely to switch banks.  

For merchants, appearing in trusted digital banking channels can create new opportunities to stay top-of-mind, encourage repeat purchase and increase customer lifetime value. 

Cardholders want to be able to access information about their card usage and manage their finances without having to contact their issuer. In fact, 72% of consumers said they place a high value on self-service, and the same percentage use mobile banking on a weekly basis.

Tools that provide transaction insights and clarity can prevent customers from having to contact their issuer every time they have a question about a purchase, because answers to those questions would be available through their banking app. 

Issuers incur $9.08 to $10.32 in costs on average for every dispute they process. By offering self-service tools that empower customers with more purchase information, issuers can effectively reduce disputes and the number of inquiries that reach their call centers, easing their operational burden.

Taking these and other steps can help drive customer LTV for banks — an increasingly vital metric given the growing competitiveness in today’s market. Those that take steps to increase their LTV will be the ultimate winners.