There has been a ton of news around new loyalty programs and different card-based offers to promote better customer loyalty. What ever happened to the good old-fashioned credit card rewards program?
On any given night, you might see commercials that push these tempting rewards you can cash in on for simply using a certain credit card. Banks constantly are trying to market their credit cards with enticing offers like 2% cash back on all purchases, triple the points on certain purchases for vacation getaways or double miles for every buy at select retailers.
Consumers, depending on their personal financial information (like their credit score) and relative desire for rewards programs will choose a credit card and begin spending. They will start earning points based on purchases to use towards rewards; rewards that could be automatically transferred into cash or redeemed for something else through a merchant network, a group of retailers in partnership with the card issuing company and companies like Cartera Commerce that help provide merchant networks.
For a long time credit and debit cards were a cash cow for banks and card issuers alike, as far as revenue was concerned. Banks would make money off credit card interest, as well as charge merchants a transaction fee for every debit card swipe. Then the Durbin Amendment passed with its final ruling just over a month ago, which caps card issuers on what they can collect on transaction fees: 21 cents per transaction on top of .05% of the value of that purchase. Bottom line: card issuers just lost a huge source of income and the whole concept of merchant networks is being reevaluated.
Now we are seeing a bunch of new companies rush in to capture customer loyalty yet again with a set of enticing offers through mobile apps or new functionality.
Enter card-linked offers.
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