MasterCard expands loyalty options for business debits

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By: Wise Marketer Staff |

Posted on May 28, 2004

MasterCard International has expanded its suite of loyalty and reward programmes in an effort to help current and prospective issuers of its Debit MasterCard BusinessCard to acquire and activate commercial debit card users while increasing usage among current cardholders.

The new loyalty-based programmes include a turn-key rewards platform called Preferred Rewards, a direct mail activation campaign called Cash Rewards, and a sales incentive drive for employees of MasterCard financial institutions who secure new commercial debit card holders.

In 2003 the Debit MasterCard BusinessCard experienced a 36% increase in issuers, 58% increase in cards issued, and a 67% increase in transaction volume. There are now more than 60 principal issuers for the card.

Helping issuers
"The suite of new debit loyalty and reward solutions, as well as the employee sales incentive campaign, is designed to help our customers attract and better serve small business DDA relationships," said Richard Lyons Jr., senior vice president of the Deposit Access Group (North America) at MasterCard International.

"Our research shows that our turn-key, customised or one-time promotional reward programmes will help issuers move the payments of small businesses to commercial debit cards while supporting our customers' efforts to build deeper financial service relationships with this largely-untapped prospective cardholder base."

Huge market opens up
Recent research by MasterCard identified the need for a commercial debit card option for small businesses. According to the study, 99% of small businesses report having cheque accounts but only 13% currently use a debit business card. Moreover, small businesses indicated that 67% of their annual business expenses are paid by cheque. However, among small business debit card users, 80% reported being "very satisfied" or "extremely satisfied" with their commercial debit card, and 75% consider themselves frequent users of the card.

"Like consumers, small businesses that use debit cards report exceedingly high levels of satisfaction," noted Steve Abrams, senior vice president for MasterCard Corporate Payment Solutions. "Our MasterCard Working for Small Business programme, and the new collection of debit loyalty and reward programmes, should provide the tools to help issuers acquire and activate these accounts."

Cash Rewards
The MasterCard Cash Rewards programme uses proven direct mail pieces and cash-back offers to support small business debit cardholder activation efforts, while also providing usage-incentives for infrequent card-users.

MasterCard will fund development of customised direct mail packages, handle rewards fulfilment, and cover postage costs. The promotional effort also includes targeted discounts at a number of leading business merchandise providers such as Office Depot,, The New York Times, and IBM.

Preferred Rewards
MasterCard's expanded Preferred Rewards turn-key loyalty and rewards programme awards cardholders one reward point for every US$2 in small business debit (signature purchase) transactions on the card. Cardholders can combine points earned from these transactions with purchases made using personal MasterCard debit cards.

In addition to free air travel on any airline with no blackout dates, points can be redeemed for electronic goods, hotel stays and travel packages, as well as discounts at Home Depot, Office Max, Best Buy, and other retailers. Through the Preferred Rewards for Business website, cardholders can access their rewards information and redeem points. Preferred Rewards leverages the company's existing rewards platform for small business, MasterCard Business Bonuses, which originally launched in 1999.

Sales incentive campaign
In addition to loyalty and usage programmes, the sales incentive campaign involves a series of sweepstakes aimed at rewarding financial institutions' personnel for acquiring small business debit cardholders.

During scheduled sales drive periods, each participating institution's sales-force will have opportunities to win prizes such as a trip for two to the Major League Baseball 2004 World Series or the MasterCard Alamo Bowl, or to Hollywood and Orlando experiences at Universal Studios Theme Parks.

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