Overview
Boston, MA
November 2003
Loyalty Programs:
Chip's Real Potential Unlocked
NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP
Until now, smart card industry in the U.S. hasn't found the magic application that will motivate merchants to replace POS terminals and expedite back office upgrades. Smart card-based loyalty programs can be the catalyst, and create a snowball effect in the solution of this "who moves first?" problem.
In a new research report "Loyalty Programs: Chip's Real Potential Unlocked", Mercator Advisory Group examines innovative loyalty programs and their strategic implications for the businesses in the payments industry.
Loyalty programs are used to increase acquisition, retention, usage, and average ticket and thus revenues. According to Evren Bayri, author of the report, "influencing consumer behavior through rewards can facilitate implementation of various business strategies. Business goals that are effected by and require a change in consumer preferences at the POS such as using a smart card instead of a magnetic stripe card or making offline debit transactions rather than online debit transactions can be accomplished through a carefully planned loyalty program."
The report examines the synergies between loyalty programs and smart cards: i.e. Loyalty programs can help to expedite the smart card penetration as smart card technology offers the ability for more data intensive programs that will add value for both cardholders, issuers and merchants alike. As a matter of fact, Bonus Card, a MasterCard co-branded smart card with a coalition loyalty program developed by Incline Village, NV-based Quantum Loyalty Systems and Istanbul, Turkey-based Garanti Bank, reached 1.8 million members with a network of 650 program partners at 17,000 merchant locations after 2 years of its initial launch in 2000.
The demand for loyalty programs is still present and it is growing significantly as can be seen by the number of vendors that offer loyalty solutions and the range of their offerings. The report provides a high level overview of loyalty programs, examines sample loyalty programs highlighting successful strategies, and provides a compilation of loyalty solution vendors and their solutions.
This report contains 27 pages and 9 exhibits.
Members of Mercator Advisory Group have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits. Please visit us online at www.mercatoradvisorygroup.com.
For more information call Mercator Advisory Group's main line: 508-845-5400 or send email to [email protected].
Learn More About This Report & Javelin
Related content
Credit Card Data Book, Part 1: Risk and Opportunity Metrics in a Trump 2.0 Business Environment
The U.S. consumer credit card market looks to be stable and resilient in 2025, with a few potential legislative curveballs from the new presidential administration that bear watchi...
2025 Credit Payments Trends
In 2025, credit card issuers are not just facing change; they are at the forefront of shaping the future of the consumer credit industry. Despite the weakening consumer economics, ...
2024 Mass-Market Credit Cards Scorecard
Mass-market credit cards must balance features and rates to attract average U.S. consumers. This Javelin Strategy & Research report benchmarks general-purpose credit cards by 10 ma...
Make informed decisions in a digital financial world