Posts by Ed Kountz from June 04, 2008

Ed Kountz | June 04, 2008, 10:37 AM
Rewards Trends and Contactless in Payments /Transit

Since the intro of Discover’s first cash-back rewards card in the 1980s, rewards cards have increasingly taken center stage versus non-rewards and co-branded cards. Cash-back, along with air-miles and “points” (redeemable for cash, air miles or other products) remain the top-three types of rewards received by U.S. cardholders, JupiterResearch survey data indicate. But as consumers have come to expect “something back” when making a credit card payment (as regular readers know, debit’s somewhat different) efforts to differentiate rewards offerings—making them more appealing to cardholders—will continue.

Citibank’s Extra Cash program shows the trend (the latest, among innovations such as Keep the Change and Chase Freedom, to give the customer more control, more back, or both). ExtraCash from Citi is available on Platinum Select, Diamond Preferred and AT&T Universal Platinum cards, among others, and cardholders are automatically enrolled (site registration may be required). Extra Cash accumulates when consumers use their participating Citi cards, and can be used to make purchases (emphasizing the Instant Savings aspect) on the ExtraCash program website.

Driving consumers to an additional, particular website is never easy, but the program is intriguing…offering discounts on name-brand hotels, travel, entertainment and other purchases made thru the site.

Link

While visiting a small college town (sub-5000 population, including students) in the Midwest the other week, I stopped by a Dairy Queen … my first time in at least two decades.

There at the drive-thru was a Vivotech contactless card reader, hot with the major card brands and the universal contactless acceptance symbol. Regular readers know my belief that, in a multi-sided market, adequate merchant acceptance is key to new product success. Based on my experience, this IS happening. But perhaps not surprisingly…and reflected in informal polling in other cities I visit…reports of usage remain modest. To overcome its visibility hurdles, contactless must have more marketing support to cross the Rubicon of consumer awareness and usage. But in a sign of progress, kudos to DQ for employee training…the staffer knew the product, the purpose, and the process like a pro. Good shakes, as well.

Also on contactless, the Boston Fed’s Emerging Payments Research Group (EPRG) has just released a new pub – The Contactless Wave- A Case Study in Transit Payments, looking at contactless transit fare collection technologies, successes overseas, and impact on the U.S.

LINK