PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Card Rewards: Are You Being Engaged?

Ken Paterson by Ken Paterson
May 18, 2011
in Uncategorized
0

Woman's hand holding a smart phone.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

It seems industry observers are just waiting fora major decline in credit and debit rewards programs, the formerdue to portfolio economic pressures (reduced consumer borrowing,continued high charge-offs, etc.) , and the latter due to decliningdebit revenues under the Durbin Amendment. Whether eliminatedentirely or just devalued, card reward programs are in danger ofcutbacks. But it’s not a bad time to take stock of programeffectiveness, especially when one considers the data.

A new study by Colloquy and marketing technology firm SwiftExchange estimates U.S. consumers build $48 billion of value inloyalty program value each year, but that a third of it goesunredeemed. Mercator’s CustomerMonitor consumer survey datacertainly confirms weakness of consumer engagement on the debitside of card rewards, with just one in four debit rewardsparticipants saying they had ever redeemed rewards from theirprograms. Our survey data shows that a good measure of theengagement gap relates to lack of initial and ongoingcommunications from the bank sponsor of the program -ironic, givenbanks’ investments in some debit rewards programs. Cardholderreactions certainly indicate it’s time for a debit rewards programreview, Durbin Amendment or not!

With credit card rewards, the stakes are higher, driven bycardholder expectations. Over two thirds of credit cardholdersparticipate in rewards programs, and our surveys show an importantsegment is more focused on maximizing their rewards byconcentrating spend on a selected card. And with issuers stillfocused tightly on the prime and superprime segments, few issuerscan afford to let their competitive offers down as everyone battlesfor the same prospects. Our data shows that consumers participatingin credit rewards programs are much more likely to have maintainedor increased their credit card use during the 2009-2010 period.Engagement has its benefits.

In these times of consolidation, it makes sense that consumers needsome incentives to select a new card, or to move a card to top ofwallet. But they also need to be reminded, time and again, whythose were and are good choices.

Tags: DebitMercator InsightsMerchant AcquiringMobile PaymentsPrepaidSocial Media
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    digital payments

    Navigating the Future: Top Digital Payment Trends to Watch

    March 31, 2023
    scams

    As Scams Become Omnipresent, New Tools Can Help FIs Fight Back

    March 30, 2023
    item clearing

    As Check Volumes Decrease, Financial Institutions Need to Consider Alternative Clearing Options

    March 29, 2023
    payments friction

    Too Much Payments Friction Can Lead to Customer Chafing

    March 28, 2023
    online fraud

    Understanding the Cost of Online Fraud and How to Prevent It

    March 27, 2023
    live shopping, ebay

    Q&A: eBay Exec on Live Shopping and the Future of Payments

    March 24, 2023
    AI and Biometrics in Regulatory Compliance in Finance

    The Importance of AI and Biometrics in Regulatory Compliance in Finance

    March 23, 2023
    Everyone Benefits from the Real-Time Payment Networks  

    Everyone Benefits from the Real-Time Payment Networks  

    March 22, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result