• DALLAS
The Army & Air Force Exchange Service (AAFES) has been providing credit solutions for the military community for 45 years, ever since it debuted the Deferred Payment Plan (DPP) to help protect service members overseas from predatory lenders outside the gates.
When the DPP was re-launched for all branches of service as the Military Star Card in 2000, the plan was always for service members to use the card anywhere they went on the installation.
But the plan kept running into the same problem: integrating the Military Star Card at point-of-sale (POS) systems outside the Exchange.
“Whenever the Exchange adds in a vendor, such as Panera or GNC, those companies all have their own POS systems, and time and again, the process of integrating Military Star was extremely lengthy, challenging and expensive,” said Joseph Todd, Exchange Credit Program (ECP) vice president (VP) of credit operations, who headed the expansion project.
“The vendors were usually very eager to accept Military Star, but the challenges to integrating were too great to justify the business case,” he added.
REDUCING THE BARRIER
Working through integration with a single vendor company could take nine to 12 months — a process that would have to be repeated with each and every company the Exchange does business with.
“The team started tackling ideas on how we could reduce that barrier, and we knew that if we were able to work with one of the four major global credit networks, that would eliminate this obstacle of integration,” Todd said.
ECP reached out to the big four credit card networks — Visa, MasterCard, Discover and American Express — to see what they could offer.
THE BEST FIT
Across the board, Discover was the best fit.
It was important that ECP retained management and ownership over the card — it remains a Military Star Card, not a Discover Card, and not a co-branded card.
Military Star had, from 2008 to 2015, offered a co-branded card with MasterCard, which meant that it was able to be used both at the Exchange and also off-base.
Besides often causing confusion among customers, the separate co-branded card posed another problem of having two companies as stakeholders: disagreement on which card members to approve or deny.
“A young E-1 who joined the military at 18 might not have any credit at all,” Todd said. “The major banks don’t want to take a risk on a shopper like that, but those are the exact people the Military Star Card was designed to help.”
ECP remains the sole issuer of the new card, meaning it can still
offer its industry-low APR to all card members, regardless of credit score, and ECP will retain full control over all credit decisions.
COORDINATION
Once an agreement with Discover was reached, the biggest challenge was coordinating with external partners — the sister services, Morale, Welfare and Recreation (MWR) and others —as well as all the different directorates within the Exchange —Information Technology (IT), Finance & Accounting, Services and Food, Ecommerce, Marketing, Corporate Communication and others.
“It wasn’t quite every group at the Exchange, but it was pretty close,” Todd said. “We all had to move forward together, so it was a lot of coordinating and integrating with everyone across the board.”
ECP offered live and recorded training sessions for store associates, as well as frequently asked questions and sign kit guidance.
The team also reached out to the Navy Exchange Service Command (NEXCOM), Marine Corps Exchange (MCX) and Coast Guard Exchange (CGX) to ensure their associates were up to speed on the changes.
ACCEPTANCE, FEATURES
Now, 24 years after the Military Star Card first launched, it can be accepted at any service, merchant or vendor across the installation that accepts Discover — and that is only the start of the benefits.
“The most exciting part is the way we’re jumping so far forward with the card capabilities,” Todd said. “The new card is chip-enabled, so it’s more secure. It can be loaded in mobile wallets, and customers can immediately use tap-to-pay — all of that came off the shelf with Discover.
“Otherwise, ECP would have had to build each of those capabilities from the ground up. It’s a massive upgrade that benefits both the Exchange and card members.”
The new features are especially key for younger members of the military community.
“This is what our customers want — our younger customers, especially, expect this,” Todd said. “The Military Star Card now offers a totally new and different digital experience.”
New cards are being issued to current card members in waves throughout the fall, with most having their new card in-hand by Veterans Day and in time for the holiday shopping season.
HURRICANE ASSISTANCE
AAFES announced on Oct. 4 that Military Star is offering card members who have been affected by Hurricane Helene emergency assistance with their accounts.
Card members can receive 90 days zero-percent interest and no payments on existing balances and new purchases by calling the Military Star Contact Center through Nov. 1 at (877) 891-7827.
“As our resilient military communities begin the recovery process after this devastating hurricane, the Military Star team is here to offer assistance,” said Tommy Ward, ECP senior vice president (SVP).
“Card members can have a little peace of mind while they focus on taking care of their communities,” Ward added.
Source: AAFES
Edited by Larry Lapka
