Banking & Financial Institutions

Company Profile

  • Transaction bank
  • Bank handles payment transactions on behalf of other banks

Situation and Objectives

  • The bank failed to explicitly reward those customers who were heavy users of the system and who made its cost structure viable.
  • In addition, the bank’s pricing process and terms and conditions were highly obscure, a consistent pricing logic was missing.
  • In this highly standardized business, it is important to strengthen your value proposition and ‘escape the commodity trap’ by offering customers value-added services wherever possible.


  • To gain transparency, we performed an intensive analysis of client and transaction data.
  • In parallel, a series of workshops were held with senior management, sales and selected customers. Particular emphasis was put on including opinion leaders.
  • Customer and competitor reaction to price changes was analyzed using the Simon-Kucher’s PriceStart methodology (knowledge of internal experts to make recommendations based on price elasticity estimates).
  • All this information was then combined into a decision-support model to assess alternative pricing scenarios with respect to their effect on customer retention, transaction volumes, revenues and profits.


  • Pricing and offering complexity was significantly reduced. Each customer was free to choose the most appropriate combination of fixed and variable price components – the higher the fixed amount, the lower the transaction fee.
  • The bank’s value proposition was significantly enhanced through value-added services (e.g. a package of analytical services (“Analysis Package”), which provided customers with complete transparency on the current state of their business).
  • Due to the inherent scalability of the business, payment processors look to secure the greatest possible share of customer transactions. The new price model was designed to incentivize usage of the payment system via various types of bonuses.


  • Significantly expanded share of wallet with bank’s most important customers
  • Increasing revenues while driving cost per transaction down