Credit card loyalty meets microinvestment
Loyalty marketing is due to become mainstream among brokerage firms and mutual fund companies, following a new deal struck between independent credit card issuer, MBNA America Bank, and microinvestment technology provider, Vesdia Corporation.
Under the agreement, Vesdia is to provide its microinvesting platform and loyalty programme management services to MBNA for the benefit of its affinity credit card clients. But even if not suited to all of the bank's affinity clients, the microinvesting loyalty platform will be added to the range of co-marketing options available to them.
According to Vesdia's chief marketing officer, William Koleszar, the technology is expected to be used for the issue of co-branded credit cards bearing the names of mutual fund companies and brokerage firms.
The microinvesting platform, which can now be adopted by MBNA's affinity credit card clients, enables loyalty programme members or credit card holders to save toward major life events, taking advantage of up to 20% rebates on every-day purchases made through Vesdia's network of over 500 retailers and 127,000 grocery stores, which includes names such as Gap, Barnes & Noble, Dell, and Blockbuster.
The technology tracks the transaction from the point of purchase and deposits merchant rebates into the cardholder's designated investment vehicle. In addition, the technology also serves as the 'savings engine' behind Vesdia's own college savings programme, BabyMint, as well as its recently launched retirement savings programme, NestEggz.
According to Financial Research Corporation, merchant and credit card rebates, such as those facilitated by Vesdia's platform, have the potential to represent an incremental US$1.1 billion per year in assets to banks and investment management firms.