Consumer Payment Card News

Loyalty Programs

There are more than 1.3 billion members of loyalty rewards programs in U.S. with nearly 500 million linked to airlines and financial services. Fueled by credit cards with rewards as primary competitive weapons, financial service loyalty programs have soared by 164% this decade with 239 million members. New research from OH-based COLLOQUY found that the average U.S. household belongs to 12 loyalty programs, but only 4.7 yield active participation. With the exception of the “American Express Platinum” card and “Diners Club,” affluent reward cards were virtually nonexistent in 2000. Today, dozens of card products
now cater exclusively to affluent U.S. households such as “VISA Signature,” “VISA Signature Preferred,” VISA Infinite,” “World MasterCard, ” “World Elite MasterCard” and Discover’s new “Discover Network Premium Card.” COLLOQUY says the challenge will be for issuers and their loyalty service providers to resist the siren call of simple cash-back rewards schemes and to provide differentiated reward programs while controlling costs.

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