ABSTRACT
This chapter on profitability provides an activity-based approach to developing the card issuing profit and loss account. It reviews core operations only which deal with the management of customer records, transactions, and billing. The successful management of payment card operations requires the pursuit of the following key managerial objectives: delivering business strategy, delivering business strategy and operational efficiency enhancement. The concept of operational flexibility is rather vague. In addition to providing security against unauthorized access to system applications and data, an operations department must always ensure controls are in place that ensure system integrity. A key element in managing operational risk is the design and deployment of operational controls – checks and procedures – that identify errors and irregularities. Working in conjunction with the legal/compliance department, compliance procedures are built into the operations infrastructure. Authorization processing is highly automated and the operations department usually does not employ any significant number of staff to supervise this area.
