Have a Higher Average Spend - The average spend on a co-brand card is significantly greater than a non-rewards card.
Have Higher Growth Rates - The spending on co-brand credit cards represents over one half of all credit card spend. Consumers who have a co-brand card usually use it as their primary card. In fact, a recent study indicated that 53% of American credit card users had a co-branded card, and 64% of them used the card at least once per month.
Create More Loyal Customers - Customers who have co-brand cards tend to be more loyal to the sponsoring company and they tend to spend more with them.
Represent a Potential New Revenue Stream - Typically companies enter into a contract with a bank that will issue and market the co-brand card. If the co-brand is viewed as strategic, there could be a separate contract with a network ( e.g. Visa, MasterCard, American Express and Discover) as well. For prepaid co-brand programs, there are often other entities involved for the marketing and distribution of the cards.
If the contracts are structured properly, this could lead to substantial revenue streams.
Building partnerships that work
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