2016 Annual U.S. Debit Rewards Review with U.K. Comparison

  • ID: 3625614
  • Report
  • Region: United Kingdom, United States
  • 19 Pages
  • Mercator Advisory Group
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Debit Rewards Programs are Available to Most Checking Account Customers, Both in the U.S. and the U.K.

FEATURED COMPANIES

  • Ally Bank
  • Bank5 Connect
  • BB&T
  • Charles Schwab
  • HSBC
  • RBS
  • MORE
Decreases in checking account ownership as a result of competition from online-only banks and alternative financial providers, plus Millennials’ professed love for rewards have increased the importance of debit card rewards. The latest research report, 2016 Annual U.S. Debit Rewards Review with U.K. Comparison, examines how the 50 largest banks and credit unions, plus the leading online-only banks in the U.S. are supporting rewards programs to help manage these market forces while balancing challenges with profitability.

The market is showing greater reliance on merchant-funded discount networks (MFDNs), to defray the cost of rewards. Also, there is a slight shift toward relationship rewards which has some very practical opportunities. It allows financial institutions to promote or deemphasize certain products and services while allowing additional lines of business, to share in the support of these programs.

This report also looks at the U.K. market and the role that rewards play in retaining consumers’ loyalty. The U.K. bankers are experiencing unprecedented competition from new financial institutions called "challenger banks" and a countrywide initiative to make it easier and faster for consumers to switch from their current banks to competitors.

Highlights of the report include:

- Understanding the evolving consumer trends in checking account ownership in the United States

- Changes in debit card ownership and usage

- Review of market forces that impact debit rewards

- Trends in the use of merchant-funded discount networks and relationship rewards

- A survey of debit reward programs at the 25 largest banks and 25 largest credit unions in the U.S.

- A comparison with U.K. banks and their use of account rewards
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FEATURED COMPANIES

  • Ally Bank
  • Bank5 Connect
  • BB&T
  • Charles Schwab
  • HSBC
  • RBS
  • MORE
1. Executive Summary

2. Introduction

3. Debit Card Market Underpinnings

4. New Challenges
- Holding On with Debit Rewards
- Debit Rewards Trends

5. Survey Says
- Banks
- Credit Unions
- Online Banks

6. Comparison with U.K. Debit Rewards
- The U.K. Competitive Environment

7. Conclusions
- Endnotes

8. Appendixes
- Appendix A: Top 25 Retail Banks’ Debit Rewards Program Details
- Appendix B: Top 25 Credit Unions’ Debit Rewards Program Details
- Appendix C: Online Banks’ Debit Rewards Program Details

List of Tables

Table 1: Survey of Debit Rewards Programs at the 25 Largest Banks
Table 2: Survey of Debit Rewards Programs at the 25 Largest Credit Unions
Table 3: Survey of Debit Rewards Programs at the Largest U.K. Banks

List of Figures

Figure 1: Fewer U.S. Consumers Have Checking or Savings Accounts at Banks, Especially the Young and Affluent
Figure 2: 3 in 5 U.S. Households Use Debit Cards; Slightly More Consumers Use Credit than Use Debit
Figure 3: Half of the U.S. Debit Card Users Have Rewards and 70% Use Debit Cards More Often, Especially Young Adults
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- Ally Bank
- BB&T
- Bank of the Internet USA
- Bank5 Connect
- Barclays
- Capital One
- Charles Schwab
- Discover
- Federal Reserve Bank of Philadelphia
- Financial Conduct Authority
- HSBC
- Lloyds
- RBS
- World Bank
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