Picture this: each time you buy a kilo of red apples at your neighbourhood supermarket using your card, you may be one step closer to watching your favourite red football team at Old Trafford, home of Manchester United. Or imagine settling your monthly utility bills knowing that each dirham you pay is adding a small contribution towards air tickets on your favourite airline for your next vacation.
Co-branded cards tie in to a consumer’s affinity to a franchise, a sport, a cause or a lifestyle, providing them with an opportunity to connect with their favourite brand and being rewarded for it. Partnering brands benefit from the customer loyalty they receive while banks obtain access to a new set of clients, making it a winning proposition for all. In a place like the UAE, where more than 200 nationalities live, work and play, it also acts as a unifier of sorts, cutting across nationalities and cultures.
Different swipes for different folks
Around the world, co-branded credit, debit and prepaid cards reward the consumer’s affiliation to anything — from airlines, telecom operators and retailers to hotel chains, universities, charities and sports, allowing them to earn free flights, hotel room upgrades, cash-backs or match tickets, among other things. Customers cite that the most important reason for choosing a credit card is the rewards programme it offers with over half opting to choose a co-branded card, while the partnering brands see two out of five customers becoming a more loyal customer.
Several of the largest airlines globally such as Emirates, Delta, United and others have strong co-branded card offerings. All major hotel chains such as Marriott/Starwood, Hilton, IHG and Hyatt offer co-branded payment products in most countries globally. MasterCard and Telefonica, a telecommunications company, issue co-branded credit cards across 11 countries in Latin America.
With the rise of the millennial generation and the digital economy, new-age merchants are joining the bandwagon. E-commerce giant Amazon has introduced a co-branded credit card, in partnership with Chase in the US, with up to 5 per cent cash back rewards redeemable when shopping on their site or with other partners. Ride hailer Uber has tied up with Visa to offer a card that rewards for spends on purchases through Uber Eats, and the first Apple credit card is expected soon, incorporating the Apple Pay wallet feature.
Closer home, the UAE is a vibrant co-branded card market with annual spending of Dh100 billion, about half of total card spending that is seeing double-digit growth annually led by leisure-related spending. Banks such as Emirates NBD offer a range of co-branded cards for the airline, travel and hospitality sectors, including the introduction last week of the Emirates NBD U by Emaar credit cards offering customers an opportunity to uniquely experience Dubai and its lifestyle.
As much in your heart as your wallet
Policy and implementation are geared towards making the UAE a happy place to live, the idea enshrined in Smart Dubai’s Happiness Agenda that ‘the most important job for a city is to ensure the happiness of its residents and visitors’.
For banks, co-branded cards are a way to keep their finger on the pulse of what makes customers and communities happy. Analyses of spending patterns can make for insightful, better products, and more personalised rewards. Co-brand issuers are also using big-data-based tools to push real-time offers based on customers’ geographic location and spending habits. With advancing digitisation, it is now possible for customers to earn and redeem reward points instantly without having to wait for vouchers or coupons, as well as track usage via their mobile devices.
Most major league football clubs today offer co-branded payment cards enabling customers from all parts of the world to be part of the community and the excitement. Cards that partner not-for-profit organisations such as the World Wildlife Fund or Make-A-Wish also help customers and banks to come together to support worthwhile causes as well as build engagement, often worth more than a mere donation. Most co-branded cards today allow customers to donate their reward points towards charities of their choice.
Successful co-brands help banks provide customers with enhanced value that keep them in front of their wallets as well as with an emotional connect with like-minded partners that appeal to their hearts. Here’s to more such rewarding associations.
Suvo Sarkar is the senior executive vice-president & group head of Retail Banking & Wealth Management at Emirates NBD.