Consumer appetite for rewards remains strong, but the legacy economics that fund those programs are under increasing strain.
Historically, banks and card issuers have depended on interchange revenue from credit card transactions to fund cashback and rewards. But now, that model is under pressure as consumer behavior evolves and more people shift to using debit cards.
This is creating a funding gap for rewards programs.
To keep delivering the rewards consumers expect, banks and loyalty providers need to rethink how those programs are funded. There’s a clear shift toward merchant-funded rewards, where retailers help foot the bill by paying a commission for driving sales.
In this infographic, explore how merchant-funded rewards can bridge the interchange funding gap and turn loyalty programs from internal cost centers into externally-funded revenue generators. (Download the full infographic as a pdf.)