Despite the recent MasterCard and Visa settlements (which changed the value of debit card transactions for member banks), debit card loyalty rewards programmes can still deliver substantial value to both banks and consumers, according to research from Maritz Loyalty Marketing.
According to Maritz, recent industry research showed that 20% of all consumers in the US were in a debit card rewards programme, and 88% wanted to participate in such a programme.
"The incremental impact of these programmes is so big that banks are continuing to develop them," said Chris Moloney, an industry analyst for Maritz. "Both Visa and MasterCard have made major announcements promoting the viability of new debit card rewards programmes."
A recent Maritz Poll revealed that approximately 29% of consumers are now in a credit card rewards programme - a number which has been increasing. By comparison, 24% of consumers polled participate in an airline frequent flyer programme.
The same poll also found that 80% of consumers said the rewards programme drives them to make more purchases with the company offering the programme.
Better for banks
"These debit programmes have been delivering huge results for banks, and banks are using them to become more customer-centric and to take an enterprise-wide customer approach," explained Moloney.
"We have seen the introduction of these programmes drive incremental spending by 45% - 80% on debit cards," Moloney added. "We've also seen some segments increase their average transaction amount by up to US$10 due to rewards programmes."
According to Moloney, many banks still only see a debit card as a source of interchange fees while, in reality, consumers are viewing debit cards as a key part of their relationship with their bank.