Reward and loyalty prepaid debit card programs
Most loyalty cards can be used in conjunction with credit card reward programs. Hotel discounts and other rewards are given just for using a credit/debit card. You accumulate points toward a reward structure, based on how much you use the credit/debit card over a period of time. Each credit/debit card offers different ways of calculating how many points you get for each increment spent. Sometimes you earn bonus points when you buy through a trading partner of the credit/debit card provider. Occasionally there are special offers of bonus points for a limited time
Looking ahead there are four mass-market prepaid opportunities for UK banks & businesses to consider:
Prepaid top-up payment services;
Credit/prepaid co-brand cards;
Companion cards;
Contact-less prepaid cards.
Prepaid top-up revenues in the UK reached US$15 billion by 2006, with prepaid mobile telephony accounting for over 50% of top-ups. Visa estimates that 60% of top-ups are made using e-top up cards and 30% of top-ups are made using vouchers. The payment margin on e-top ups is about 7%. Visa, MasterCard and specialist payment service providers such as Txt-Order already provide multi-channel top-up payment services for prepaid providers and banks could earn up to 2.5% of the top-up transaction. Cardholders can link their credit or debit card to a number of prepaid mobile phone accounts and other prepaid accounts and using a PIN can top-up via SMS. Providing a top-up payment service is a quick win for any card issuer and should deliver a swift ROI.
