|People will pay for their debit card rewards|
Opportunities exist for earning fee revenue from debit card reward programs, according to a recent survey by Synergistics Research.
Findings reveal that half of debit card users report that they are offered some type of reward program with their debit card. When asked if they pay a fee for their reward program, more than four in ten of those debit card users who are offered rewards indicate they do so.
One-fourth report that they are paying an annual fee; one-fifth indicate that they are paying a monthly fee.
In addition, all debit card users were asked if they would pay several different levels of fees for a debit card reward program that appealed to them. Significantly, one-fourth would be willing to pay $50 per year. Not quite one-tenth might pay $30 per year, and another one-tenth would pay $20 per year. Overall, somewhat more than four in ten express some willingness to pay a fee for debit card rewards.
Genie M. Driskill, COO of Synergistics, says, “The future outlook for debit card rewards is of high importance to all issuers. Some have already scaled back or even discontinued their reward programs. Others continue to evaluate them with an expectation that they will not survive in their current form. However, findings from our survey are somewhat reassuring in that debit card users appear to be willing to pay for rewards they find to be appealing. A significant proportion of debit card users—more than four in ten—are willing to pay a fee at some level, with a notable number responding at the $50 annual fee level. In addition, more than four in ten of those who have debit card rewards report they currently pay some type of fee for this reward program. These findings tend to indicate that debit rewards should be offered as a fee-based, value-added enhancement or upgrade for debit cards.”
These are among the findings from, “The Future of Debit Card Programs,” featuring 1,006 internet interviews with consumers age 18 or older. The syndicated research is available for purchase. Details on the Synergistics website.
[This article was posted on July 2, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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