FIS introduced Walmart as its latest partner in the FIS Premium Payback program. This allows customers at Walmart stores to utilize pay with points options during checkout with a single prompt. The move provides access for financial institutions (FIs) using the FIS product to Walmart, the world’s largest retailer. The FIS announcement provides additional details on the program and partnership:
“The addition of Walmart to the Premium Payment network will give millions of consumers the opportunity to redeem their credit card rewards points for real-time discounts at more than 4,700 Walmart stores across the U.S. Walmart customers using eligible cards will be prompted at checkout with the option to turn their card rewards currency into discounts, which will be deducted from their purchase amount.”
Pay with Points: an Alternative Payment Method
The move identifies advancement to accept award redemption as a substitute for other prepaid vehicles, such as gift cards. It also gives a benefit to FIs looking to increase share of wallet with their reward earning credit cards. Points can be a valuable asset for consumers who are looking to use various methods to maximize their budget in the current inflationary market. This includes prepaid mechanisms. I wrote about this in my recent viewpoint. In the release, Mike Cook, Senior Vice President and Assistant Treasurer at Walmart underscores this point. He also points out the need for retailers to reduce barriers in accepting points as an alternative payment method:
“’Walmart’s mission is to help customers save money so that they can live better, and FIS Premium Payback allows customers to enjoy the benefits of their rewards in real-time at checkout,’ said Cook, ‘Today’s busy consumer is looking for a frictionless shopping experience, and our partnership with FIS makes paying with points as simple as a single prompt at the point of sale.’”
For retailers, utilization of credit card point redemption at point of sale also provides an opportunity to push retailer specific loyalty programs, that are not tied to payment method but instead to frequency and volume of purchases and visits. Mercator research, via the North America PaymentsInsights study in 2021, shows that consumers who are part of a loyalty program spend more at their chosen program outlets. As an example, 51% of members of grocery and supermarket programs indicate they spend more at their chosen store as compared to those that are not members of the loyalty program. When combined with reducing one of the larger merchant-controlled barriers of potentially cumbersome point of sale processes, the opportunity for retailers to double up on customer loyalty, with both individual’s credit card and store loyalty memberships is an important step to combat the fear of reduced spend in rough economic times.
Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Mercator Advisory Group.