Innovation in Payments - Reward Programs, Payment Loyalty and Consumer Attitudes
Description
Innovation in Payments - Reward Programs, Payment Loyalty and Consumer Attitudes
Summary
The concept of loyalty programs can be traced back over a century, to retailers and gas stations that offered customers stamps based on their spending. The accumulated stamps could be exchanged for a range of gifts from a catalog offered by these businesses. Credit card loyalty schemes have rapidly expanded to include frequent flyer points (air miles); collaborations with retailers; and tiered, increasingly individualized and exclusive benefits that operate across multiple platforms and partners. Ultimately, consumers like being rewarded for their patronage – even if they pay for it.
However, Payment Loyalty programs have lost attractiveness in recent years majorly due to COVID-19 pandemic impact and market saturation. Furthermore, reward programs appeal has diminished in recent years. Whereas points schemes were once the major draw of credit cards, now consumers favor cashback on their purchases.
Innovation in Payments - Reward Programs, Payment Loyalty by Region and Consumer Attitudes report explores trends and innovations in terms of the reward programs offered by banking and payment providers, including an exploration of the various approaches companies are taking across the world
Scope
- Alternative payment methods have disrupted the payments space. To address such challenges, credit cards fees have been reduced across the world. However, these reductions mean that issuers have had to scale back their loyalty programs.
- The COVID-19 pandemic heavily impacted the travel industry. Consumers who used to be frequent travelers dramatically reduced their spending on big-ticket items such as flight and hotel bookings, meaning that travel benefits became much less appealing.
- Due to consumers switching providers repeatedly to maximize short-term benefits, issuers have attached conditions for releasing bonuses, such as reaching specific spending milestones on cards.
- Understand current and future trends for card-based reward programs.
- Identify key players in the reward program space and learn about their offerings.
- Discover consumer preferences and attitudes towards reward programs using GlobalData surveying.
Table of Contents
34 Pages
- Loyalty programs have evolved since they were first introduced
- Payment loyalty programs have lost attractiveness in recent years
- Most reward programs are focused around either cashback or points
- Cashback is now the most popular value-added benefit
- Cashback is the most popular benefit across all regions except Latin America
- On a global basis, cashback is the most popular benefit across all age bands
- Cashback also leads the way across all affluence bands
- Chase Ultimate Rewards offers two types of reward cards
- American Express Membership Rewards
- Other popular reward programs in the US
- Travel benefits and cashback are popular in Canada
- Reward points are a key feature of loyalty schemes in Mexico
- UK banks offer their own distinct programs
- Reward programs remain limited in Europe
- European consumers show the least interest in loyalty rewards
- Most Australian issuers partner with airlines as part of their loyalty programs
- Singapore is a competitive market for credit card rewards
- Indians have leapfrogged from payment card to mobile wallet loyalty programs
- Debit card rewards are not common and often have conditions attached
- Credit card reward programs no longer benefit all consumer segments
- Enabling consumers to tailor the rewards they receive will be the next big trend
- Methodology
- Secondary sources and further reading
Pricing
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