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Michigan Credit Union League Home » Information Services » Publications » Contact » 2005 » 1st Quarter » Focus: Marketing  

Focus: Marketing

Debit Rewards: They’re Here, They Work and They’re Better than Ever

By Ed Jesionowski
MCUL Business Consultant

Rewards programs have been around the credit card scene for some time, and are still here because they work — both in generating interchange fees and in creating an enhanced level of loyalty. Chances are you’re earning points or miles in some program yourself.

Debit rewards programs, a relatively new concept compared to credit rewards, are also generating their own share of market, income and loyalty. Debit usage itself is on the rise, as more and more consumers leave cash and checks out of their payment choice equation and opt for debit cards instead. But increased debit usage alone is not enough for credit unions that issue debit cards to stay competitive and profitable.

The 2003 landmark case between Wal-Mart and Visa/MasterCard changed the rules of the game. Now, to guarantee a strong revenue stream, institutions must try to garner more signaturebased transactions. To increase debit card earnings, credit unions must influence consumer decisions to sign for purchases. Consumers must be rewarded for doing so, with a compelling reason to sign — not to use their PIN for the transaction. And sign they will, if they’re working towards the goal of earning points or gaining some other tangible benefit.

Effective debit rewards programs such as Certegy’s popular ScoreCard for Debit significantly influence your member’s choice for signature-based transactions. And for many members, rewards work well and quickly become the reason to choose the signature payment option. For each qualified purchase, cardholders earn bonus points that can be redeemed for brand name gifts and travel rewards. ScoreCard for Debit is proven to increase cardholder loyalty, signaturebased transactions and revenue for your institution.

But in an age of increasing mistrust and identity theft, programs like Certegy’s Premier Debit offer even more compelling reasons to use your signature-based debit card. Premier Debit offers ScoreCard rewards plus security benefits for a total debit rewards program.

With enhancements like an extended warranty on purchases, a 90-day product protection plan, identity theft reimbursement insurance, and identity theft victim assistance, members choose to change their purchasing behavior (as in signing for the purchase) because of those direct benefits. This is especially true when making larger purchases where an additional warranty and protection becomes more desirable. These security benefits are important to debit card users and compliment an already attractive rewards program.

In a climate where seven out of 10 mega-banks are offering debit rewards and generating more consumer awareness about the benefits, credit unions can capitalize on their huge publicity campaigns by offering a comparable and often more appealing rewards plan. According to Robert Bream, Certegy Card Services senior vice president and group executive, ScoreCard for Debit fits into a portfolio strategy that allows credit unions to offer a product that is more robust. One that can compete directly with the larger financial institution’s offering, while still retaining the level of service their members expect. Credit unions can have the best of all worlds — high value products, personal service and cost effectiveness. Finally, members will soon be able to combine their credit card and debit card Scorecard points. This will give our loyal members more incentive to use their credit and debit cards, which means more interchange for the credit unions.

The information in this article was provided by Certegy, Inc., a CUcorp business partner. For more information on debit rewards programs, contact Jesionowski at (800) 262-6285, Ext. 538.

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