Payment Card Loyalty: The Global Opportunity



Verdict Financial

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The aims of loyalty programs are customer acquisition, customer retention, increased card usage, and the acquisition of consumer transaction data. The individual circumstances of loyalty programs vary widely by market depending on a variety of factors, but they can all be shown to achieve these four aims. Credit cards with loyalty features outperform those without on numerous metrics.

Use Verdict Financial's unique data based on the Payment Card Loyalty Model to size the loyalty card market in 21 countries.
View the performance of loyalty and non-loyalty cards in terms of transaction numbers, transaction values, and revenue.
Use the interactive dashboard accompanying this brief to appraise loyalty card holding among consumers by age, wealth, income, and country.
Analyze the performance of cashback and rewards points cards in all countries covered to discover the most effective strategies in each market.

What is the size of the credit card loyalty market in key markets globally?
How do cashback cards compare with reward points or alternative rewards cards in terms of number and value of transactions, as well as revenue?
How do cards that offer loyalty benefits compare with non-loyalty cards in terms of consumer spending?

Key Highlights
Many loyalty cards have multiple types of features, especially in the most developed markets, but the most popular single type of benefit among consumers is reward points. This is likely due to the versatility of the reward card model compared to cashback.

Credit cards with loyalty features are used demonstrably more frequently and for higher-value transactions than cards without any form of loyalty feature. This indicates that cards with loyalty benefits have higher turnover and thus can earn more from transaction fees than non-loyalty cards.

Despite the higher revenue available from loyalty cards, holders of these cards tend not to revolve their balances outstanding when using these cards. Issuers therefore need to balance the major loyalty revenue streams (annual fees, interest on balances outstanding, and transaction fees) accordingly.