By extending loyalty and engagement strategies to debit through co-branded programs, institutions can reach a broader customer base while fostering loyalty and maximizing brand cachet. Because consumers use debit cards every day, co-branded debit programs create frequent opportunities to deepen engagement, reinforce loyalty, and keep an institutions brand top of wallet and top of mind.
Younger consumers increasingly prefer debit, creating a larger everyday-payments audience for loyalty programs.
Modern technology lets institutions acquire, approve, provision to wallets, and activate co-branded debit cards in minutes rather than weeks.
Co-branded debit programs produce revenue beyond interchange: they increase touchpoints, frequency, and loyalty without clear evidence of cannibalizing credit portfolios.
Debit has become the primary payment method for a growing segment of consumers—especially younger generations—yet many financial institutions continue to focus their investment on credit card programs. By extending loyalty and engagement strategies to debit through co-branded programs, institutions can reach a broader customer base while fostering loyalty and maximizing brand cachet. A Convergence of Trends As with co-branded credit cards, airlines led the charge with co-branded debit products.
Because consumers use debit cards every day, co-branded debit programs create frequent opportunities to deepen engagement, reinforce loyalty, and keep an institutions brand top of wallet and top of mind. "When you look at the most engaged customers in any loyalty program, irrespective of the vertical, the people who have the cards tend to exhibit all the behaviors that those brands want," Clarkson said. They tend to have more frequency for the brand than less engaged customers." Just as importantly, institutions that have embraced co-branded debit have found little evidence that these programs cannibalize credit card portfolios.
A New Generation of Consumers Is Changing the Role of Debit Cards. That disconnect represents a clear opportunity. "I'm an individual that had one of those airline debit programs pre-2010, and my experience at that time was you take time off work, you go into a branch, you fill out a form, you get that card a few days or weeks later and you start spending—and that demand was always there," Dunning said.
The shift is particularly pronounced among younger consumers who have grown accustomed to Apple Pay, mobile banking, and other digital payments
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