Credit Unions have long offered their members perks that traditional banks could not, including higher rates on savings accounts and CDs, and lower mortgage and auto loan rates. Soon, credit unions can add merchant-funded rewards on credit and debit cards they issue to their list. This perk may be just what it takes to enhance the appeal of a card to consumers.
Standing Out from the Crowd
In light of the impending rate decrease that debit card issuers can charge merchants, credit unions once again may be able to offer incentives that make them stand out from the crowd of banks. A new version of the merchant-reward program will reward merchants for allowing consumers to use debit cards (or credit cards) at their locations. In return, the merchants are then able to pass on rewards to the card user.
While the concept of merchant-rewards programs is not new, the ScoreMore Rewards program is. The program will most likely be made available to more merchants and more credit unions that issue debit cards than it has been in the past. The program comes from the creator FIS, which is the processor of credit and debit cards for most of the credit unions that issue these cards to consumers. The ScoreMore Rewards program is technically an add-on to the existing ScoreCard program.
According to the executive vice president of FIS Payment Solutions Group, Frank D’Angelo, “The Durbin Amendment has made it very difficult for financial institutions to offer loyalty programs to their customers due to the reduction of interchange revenue. The new ScoreMore Rewards program takes the burden of offering a loyalty program off the shoulders of the financial institution and provides them with the means to offer a new and exciting program for their customers — all at no cost to them.”
While the amendment is not yet in force, it seems as if credit unions are preparing for the fallout. FIS and its new program just may make it possible to turn lemons into lemonade for the credit unions and the merchants when and if the amendment does go into effect.