• Co-branded payment cards make it easy for customers to earn and redeem cashbacks
• Rimark’s cashback debit card combines the best of loyalty programs, cashback credit cards, and the low risk of debit cards
• Rimark enables small and medium-sized business to issue their own co-branded debit cards
• Box store and online purchases support Main street businesses when cashbacks are converted to BrandCash™
• Co-branded card programs can create a sustainable revenue stream for SMBs businesses
A co-branded card is a payment card issued by businesses in partnership with a payment card issuer or network. The card makes it easy for customers to earn discounts, points, cashbacks, or other rewards when shopping with the issuing business, and can also be used at other businesses on that payment network. Co-branded payment cards are an effective means of delivering rewards as they give customers an incentive to use the cards, which increases sales and builds customer loyalty.
The Advantage of Co-branded Cards
Co-branded payment cards are also an attractive proposition for customers. The cards make it easy for them to earn rewards with everyday purchases without having to change their shopping habits. This presents businesses with the opportunity to create a more engaging and personalized experience for customers, drive sales, and gauge the effectiveness of marketing campaigns. It also gives them a competitive advantage, sets them apart from their competitors, and creates a sustainable revenue stream.
However, these advantages can be expensive and traditional co-branded loyalty card programs require technical integrations, compliance requirements, significant financial outlays and expertise to administer the program, as well as the ability to form partnerships with card companies, payment networks, and the banks that issue the cards. As a result, co-branded credit cards tied to reward programs are primarily used by big businesses and multinational brands. These programs not only generate additional revenue and drive sales, but also serve as a daily touchpoint with cardholders.
Airline reward programs are an excellent example of how successful and enduring co-branded card programs can be. For example, United Airlines credit card rewards program is designed to provide customers with tangible benefits, encouraging them to use their card any time and everywhere as cardholders earn reward points, in the form of miles, with every purchase they make. Not only are cardholders being rewarded for using their United card, when it comes time to buy a plane ticket, cardholders will be more likely to use their earned airline miles to offset the cost of the flight. This is beneficial for both the airlines and their customers, as the customers receive rewards for using their card, and United gets to keep their brand top of mind and their card top-of-wallet for their customers.
Cashbacks Incentivize Sales
Although the reward miles issued by United have a dollar value, their credit cards are not cashback cards. With cashback payment cards, customers earn cashbacks instead of points. This means that when they make a purchase with their card, they receive a portion of their purchase price back in the form of a credit on their statement or account. For example, if the cashback rate is 1%, customers will receive a $1 cashback for every $100 they charge to their card. Cashback programs vary—most usually have a monthly or annual cap, some have tiers, where the reward is based on the amount spent in certain categories.
Regardless of the program perimeters, cashbacks are a tangible way to incentivize sales and are a marketing strategy used by businesses and credit card companies to attract, retain, and increase the loyalty and stickiness of customers. For businesses, cashbacks are a marketing expense. Credit card companies, on the other hand, use the interest and late fees from credit cardholders, and the interchange or swipe fee paid by merchants to fund their cashbacks.
As a result, it's not always possible to earn rewards on debit card purchases because of how the rewards are funded. Debit cardholders incur neither interest or late fees, making it less lucrative for card companies to offer cashbacks. Rimark’s innovative BrandCash™ rewards model uses some of the same strategies to fund the cashback program and augments them through our partnerships with individual businesses.
Rewarding Businesses and Customers
Rimark's debit card program offers a unique set of features that sets it apart from other co-branded card programs. Firstly, its hyper flexibility allows businesses to customize their rewards and benefits to meet their specific needs. Secondly, it is the only debit card that rewards cardholders with BrandCash™ points from multiple businesses, making it a versatile option for consumers. Thirdly, the BrandCash™ points are secured by blockchain technology, which allows for real-time transferability.
Cashback debit cards offer numerous benefits to both businesses and customers. As an open-loop card, it is widely accepted by merchants on the payment network, making it a more convenient and useful option for cardholders. In addition to its utility, cashback debit cards can also serve as an effective marketing tool for businesses. Through co-branding, the card can promote the business to its existing customers and attract new ones. By participating in Rimark's co-branded program, businesses can save time and money by avoiding the need to develop complex payment structures that require partnerships with multiple facilitators.
Customers also benefit from using cashback debit cards. They make it easy for them to earn rewards on everyday purchases like groceries, gas, and bills, without having to change their shopping habits. Unlike credit cards, these cards do not require a credit check and there is no risk of accruing debt or incurring interest charges because a cashback debit card is linked to a deposit account rather than a line of credit, which means customers can only spend the money they have available in their deposit account. This feature makes it easy for customers to manage their spending and budget more effectively. Cash back debit cards are great for budget conscious cardholders and those looking for strong spending controls, but how do they compare with other reward programs?
How Box Stores Pay Main Street Businesses
All loyalty programs reward customers, but cashback programs have a distinct advantage. Unlike other loyalty programs, cashback programs reward customers with cash, usually a fixed percentage of the purchase price. The rules for earning and redeeming rewards in other loyalty programs can be complex, causing the reward value to fluctuate. Cashback programs offer greater flexibility in redeeming rewards, as customers can use their cashbacks for products, services, or even cash. Other loyalty programs limit redemption options to specific rewards such as miles or beverages. Finally, the value of rewards in cashback programs is determined by dollars, making it easier to understand, while the value of rewards in other loyalty programs can vary based on how they are redeemed.
Rimark's cashback debit card offers a unique hybrid solution by combining the advantages of loyalty programs, cashback credit cards, and the low risk of debit cards. Cardholders can earn cashback rewards on eligible purchases made at participating merchants, with the amount varying based on the location of the purchase. For example, a cardholder may earn 5% cashback at their favorite coffee shop, 10% for an online purchase from a shoe store, or 5% for dining at a favorite restaurant. The cashback rewards are then converted into the BrandCash™ of the selected business and deposited into the cardholder's account. This setup creates a new source of revenue for the business issuing the BrandCash™, as the points would only be redeemable for their products or services. In this manner, the cashback earned by the cardholder when shopping at other businesses becomes passive income for Rimark's BrandCash™ partner.
A Co-branded Program for SMBs
Co-branded card programs can create a sustainable revenue stream for businesses, as has been demonstrated by companies like United, whose co-branded card program accounts for 10% to 15% of its revenue. When businesses choose Rimark's co-branded card program, they get a comprehensive solution that eliminates the need for technical expertise, compliance requirements, and structural costs, and benefit from the additional revenue generated when customers redeem their cashbacks at their business. Most importantly, Rimark's debit card program gives small to medium-sized businesses the ability to create co-branded card programs like a big business, but without the expense and administrative burden of managing the program themselves.
With the growing popularity of cashless payment systems, a co-branded payment card give businesses the means to make their brand more identifiable and increase customer engagement. They provide benefits for both businesses and customers and present an opportunity for Rimark and its Brand Cash™ partners to form mutually beneficial partnerships. Co-branded payment cards can deliver tangible results for businesses and cardholders through increased brand loyalty, increased spending, and reduced churn.