Synopsis
This report provides market analysis, information and insights into merchant-funded loyalty programs.
Scope
With the emergence of payment cards and their increasing adoption by consumers and acceptance by merchants, banks and other cards issuers have been making significant efforts to make consumers use their cards over those of their competitors. In line with this, banks have been at the forefront in issuing cards with benefits and features offered through loyalty programs. These programs allow banks to distinguish their products from the basic services offered by competitors by offering attractive deals in a variety of product categories. However, it has become apparent that bank-funded reward and loyalty programs have lost value and impact, from both the banks and consumers points of view. Banks and card issuers have introduced similar loyalty programs in the recent past, which have become mutually almost indistinguishable. This has compelled banks to carry out other expensive promotional initiatives to set themselves apart. Banks and other card issuers have also realized the benefits of merchant-funded loyalty programs and consider these programs as replacements for traditional loyalty programs.
Summary
• This report provides an analysis of the latest merchant funded loyalty business models
• Adoption rates by country
• Insight into the merchant funded loyalty value chain
Reasons To Buy
• Gain insights into creating and improving a merchant-funded rewards model
• Learn about the most effective business models
• Understand the value chain of merchant-funded loyalty programs
Key highlights
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Table Of Contents
1 Executive Summary
2 Emergence of Merchant-Funded Loyalty Programs
2.1 Comparing Merchant-Funded Loyalty Program Business Models
2.1.1 Traditional bonus-point and cashback programs
2.1.2 Premier merchant-funded programs
2.1.3 Member coalition and registered card program
2.1.4 Online-only merchant-funded programs
2.1.5 Proprietary merchant programs
2.2 Merchant-Funded Loyalty Program Adoption Levels
2.3 Merchant-Funded Rewards Programs - Value Chain and Parties Involved
2.3.1 Financial institutions and other card issuers
2.3.2 Merchants
2.3.3 Consumers
3 Appendix
3.1 Methodology
3.2 Contact Timetric
3.3 About Timetric
3.4 Disclaimer
List Of Tables
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List Of Figures
Figure 1: Consumer Expectations from Banks Loyalty Programs (%), 2012
Figure 2: Traditional Bonus-Point and Cashback Programs
Figure 3: Premier Merchant-Funded Loyalty Programs
Figure 4: Member Coalition and Registered Card Programs
Figure 5: Online-Only Merchant-Funded Programs
Figure 6: Proprietary Merchant Programs
Figure 7: Merchant-Funded Loyalty Program Adoption by Country
Figure 8: The Merchant-Funded Loyalty Program Value Chain and the Role of the Service Provider
