Visa came out on top with nine airline partnerships, while MasterCard and American Express have only six each according to an analysis of travel loyalty cards in the Co-Branded and Affinity Credit Card Study by Packaged Facts.
Visa also has more hotel partnerships with 10 co-branded credit card partnerships. MasterCard has just three in its portfolio.
MasterCard’s co-branded airline woes
MasterCard’s airline marketshare could be shrinking further with the proposed merger of American Airlines and US Airways, which is currently the only domestic carrier that Visa processes payments for. American currently works with Visa, Mastercard and America Express.
MasterCard is trying to gain a stronger foothold through aggressive pricing with travel partners, but the survey authors indicate the most promising way to draw new customers is to enhance features and benefits.
Competing for the middle class
Consumers who have co-branded airline credit cards have always been seen as being a very important segment of the market for all credit card issuers because these cardholders are typically wealthier so they spend more and represent less risk.
While competition in the credit card marketplace is high for affluent consumers, this study suggests that the middle class may well represent an opportunity for credit card companies to grow their customer base. It also indicates that experimenting with reward incentives and softer card benefits may be an effective strategy for targeting middle class consumers.
The Packaged Facts study
Packaged Facts released this market research study in early August. The study was conducted to help the industry get a better understanding of current trends and to determine which strategies are the most effective.
In addition to co-branded cards, it also looked at “own” branded and private label cards, including Ritz Carlton, Hilton, Wyndham, Norwegian Cruise Line, Princess Cruises, Sony, Best Buy, Walmart, Macy’s and Amazon.