Grocer-Affiliated Debit Program
Operating domain: Payments · Capability: Affiliated debit / tender migration and program economics
- Value at Issue
- Approved
- Confidence-Adjusted Value Opportunity
- Approved
- Projected Net First-Year Benefit
- Projected
- Verified Net Value Retained
- Finance-Verified
- Executive owner
- M. Chen (simulated)
- Working owner
- J. Whitcombe — Value Case Lead (simulated)
- Confidence
- High
- Data completeness
- 96%
- Next required decision
- Review fee statement
- Decision owner · required by
- D. Alvarez (simulated) · Aug 15, 2027
- Reporting period
- Calendar year · Q2 2027
- Scenario
- Approved base case
- Approved baseline
- Payments Value Case Template v3 · version 7
- Data as of
- Jul 18, 2027
How much value could the debit program create, what will it cost, and under which assumptions does it produce or destroy value?
What do we know?
The approved baseline, assumptions and attribution basis that convert observed loss into a defensible recoverable amount.
Why does it matter financially?
The confidence-adjusted opportunity and the projected first-year benefit are set here, net of solution cost and performance fee.
What must happen next?
Approve the baseline and the financial case so an intervention can be selected against a fixed reference.
Ledger A — own-channel tender-migration benefit
Own-channel benefit = baseline acceptance cost on migrated eligible transactions less target all-in cost on those same transactions. Credit and existing debit stay separate, and POS stays separate from ecommerce.
| Segment | Baseline volume | Eligibility | Migration | Captured volume | Baseline rate | Target all-in | Unit benefit | Annual benefit |
|---|---|---|---|---|---|---|---|---|
Credit / POS ObservedHigh confidence | $700.00M 14.0M txns | 90% | 90.1% | $567.66M | 1.990% | 0.240% | 1.750% | $9,934,080 |
Credit / Ecommerce ObservedHigh confidence | $60.00M 1.0M txns | 85% | 80.0% | $40.80M | 1.950% | 0.450% | 1.500% | $612,000 |
Third-party debit / POS ObservedMedium confidence | $780.00M 26.0M txns | 90% | 90.0% | $631.80M | 0.380% | 0.240% | 0.140% | $884,520 |
Third-party debit / Ecommerce ObservedMedium confidence | $24.00M 0.5M txns | 85% | 75.0% | $15.30M | 1.400% | 1.600% | -0.200% | -$30,600 |
| Ledger A | $11,400,000 | |||||||
Target all-in rate includes sponsor-bank per-transaction fees, issuer processing, network/transaction processing, and settlement. Those costs are therefore excluded from the cost registry deductions.
Segments that destroy value
A negative unit benefit is reported as value destruction. It is never blended into a positive total.
- Third-party debit / Ecommerce-$30,600 per year
Card-not-present affiliated-debit cost exceeds the current third-party debit rate. Migrating this segment destroys value.
- Baseline rate
- 1.400%
- Target all-in rate
- 1.600%
- Recommended treatment
- Exclude from migration scope at Select
Ownership and approval
Approved Value at Issue
The annualized avoidable loss that sets the ceiling for everything quantified downstream. No recoverable amount may exceed it.
- Annualization basis
- Approved trailing-twelve-month payments baseline, annualized on settled volume.
- Approval
- D. Alvarez — Finance (simulated) · Feb 14, 2027
- Baseline status
- Approved and locked
- Evidence quality
- Strong
Allocation by loss area
Each approved loss area, its allocation basis and the confidence attached to it. Areas without an approved allocation are shown as not quantified.
| Loss area | Statement impact | Allocation basis | Confidence | Status | Approved annual loss |
|---|---|---|---|---|---|
High-cost payment mix LAR-0001 · Jul 2026 – Jun 2027 | SG&A / EBITDA | Annual settled volume by tender × effective-rate differential between observed credit mix and an achievable debit-led mix. | High | Approved | $8,900,000 |
Avoidable processing cost LAR-0002 · Jul 2026 – Jun 2027 | SG&A / EBITDA | Line-item invoice reconciliation against the 40th-percentile benchmark; variance above benchmark treated as avoidable. | High | Approved | $6,400,000 |
Disputes, declines and reconciliation effort LAR-0003 · Jul 2026 – Jun 2027 | SG&A / EBITDA | Preventable event counts × fully loaded cost per event. Only the dispute and false-decline components carry an approved allocation; the manual reconciliation component is not yet quantified. | Medium | Approved | $2,400,000 |
Manual store reconciliation effort LAR-0004 · Jul 2026 – Jun 2027 | SG&A | No approved allocation — back-office time study (EV-1063) has not been received. | Not assessed | Observed | Not quantified |
| Allocated total | $17,700,000 | ||||
$700,000 of the approved Value at Issue is not yet allocated to a loss area. The unallocated remainder is shown rather than distributed, and it cannot be carried into any recovery opportunity until it is allocated and approved.
Key assumptions behind the amount
Assumptions that materially change the Value at Issue if they prove wrong.
- Credit share of tendered volume: 58%
- Achievable debit-led effective rate: 0.72%
- No change to basket mix or store count during the measurement period
Evidence basis: Twelve months of acquirer settlement files, processor invoices and interchange qualification reports reconciled to the general ledger.
Decision Brief
Gate: Do we approve the baseline, two-ledger value model, attribution boundaries, scenario and financial case for provider and operating-model evaluation?Do we approve the baseline, two-ledger value model, attribution boundaries, scenario and financial case for provider and operating-model evaluation?
- Owner
- D. Alvarez (simulated)
- Due by
- Aug 15, 2027
- Gate action
- Review fee statement
- Open provider-credit dispute
- Cross-case overlap review pending finance