Co-Branded and Affinity Credit Cards in the U.S., 3rd Edition

Co-Branded and Affinity Credit Cards in the U.S., 3rd Edition

The market for co-branded and affinity cards is over two decades old. Issuers have worked to make payment cards more attractive to cardholders through value-adding initiatives such as rebates and rewards. This has been a major growth driver in the co-branded and affinity card space over the past few years, but there is some evidence that the pendulum has begun to swing in favor of proprietary bank reward programs.

In the U.S., where the market for co-branded and affinity card is extraordinarily mature, experts interviewed estimate that between one quarter and one third of the plastic held by Americans are co-branded or affinity cards. And because co-branded and affinity credit, payment and debit cards have become such an integral part of the U.S. card industry, the growth of this market cannot be separated from the shift in consumer payment preferences from paper to plastic and electronic vehicles, and from the huge expansion in U.S. consumer indebtedness. Other forms of mobile payments, such as contactless cards, mobile phones and contactless watches are gaining traction.


As the U.S. market matures—and possibly plateaus—issuers are seeking new growth opportunities in Europe, Asia and other regions. However, there are wide variations in the extent to which consumers, issuers and merchant partners in the various national markets have embraced co-branding.


Scope of the Report


This report examines how the market and players have changed over the past two years, and answers important questions including:

• What new products are co-branding partners offering?


• What new segments offer the most opportunity?


• How are international markets evolving?


• How are partners coping with the world’s grim economic realities?


• What is the best advice experts have to offer?

In addition, this report features the results of the author 2009 proprietary consumer survey, which explores co-branded and affinity card usage, front-of-wallet, most desired card features, channels and card information sources.

Methodology


This study is based on extensive secondary research and interviews with industry and regional experts. Secondary sources include data-gathered from relevant trade, business, and government sources, including card industry journals, trade and general press (print and electronic), annual reports and 10(k) filings, company literature, consultancy publications,the auhtor's reports, websites and white papers.


Interviews were conducted with representatives of Discover, Visa, Visa Europe, Capital One, Kroll-Info Americas, Maritz Inc., Auriemma Consulting Group and other marketing and consulting firms operating in the co-branded and affinity card space.


Packaged Facts’ analysis of consumer behavior and demographics derives from the our Custom Online Survey of 2,606 adults, Experian Simmons Market Research Bureau’s (New York, NY) adult consumer surveys, which are based on approximately 25,000 respondents age 18 or over.


What You’ll Get in this Report


Co-Branded and Affinity Credit Cards in the U.S. makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Co-Branded and Affinity Credit Cards in the U.S. offers.


Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.


How You Will Benefit from this Report


If your company is already doing business in the co-branded and affinity credit card market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for co-branded and affinity credit cards, as well as projected markets and trends through 2012.


This report will help:

• Marketing Managers identify market opportunities and develop targeted promotion plans for co-branded and affinity credit cards.


• Research and development professionals stay on top of competitor initiatives and explore demand for co-branded and affinity credit cards.


• Advertising agencies working with clients in the banking and retail industries understand the product buyer to develop messages and images that compel consumers to use co-branded and affinity credit cards.


• Business development executives understand the dynamics of the market and identify possible partnerships.


• Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.

Chapter 1: Executive Summary

Scope of the Report

Overview

Definitions: Co-branded versus Affinity Cards

Players: Links in the Co-branded and Affinity Cards’ Value*

Methodology and Sources

Expert Interviews

Simmons Experian Surveys

Packaged Facts Conducts Custom Survey

Market Size and Trends

Consumers’ Payment Preferences

Credit and Debit Cards in Force Continue to Show a Saturated U.S. Market

Forces Driving Consumer Card and Co-branded Card Usage

U.S. Consumers Walloped

Contracting U.S. Consumer Credit

Card Issuers Winnow Their Portfolios, Cut Rewards, Homogenize Reward Programs

Reward Programs a Major Co-branded Card Market Driver

Figure 1-1: U.S. Rewards-Based Credit Cards versus General Purpose Credit Cards Without Rewards, 2003 vs. 2007 vs. 2011(F)

Co-branded Cards in Force

One in Five U.S. Cardholders has an A/S Credit Card

Packaged Facts Custom Survey Finds More than Half of Consumers Own Co-branded or Affinity Cards

Figure 1-2: Ownership of Partnership and Sponsor Cards, February 2009

Co-branding Around the World

International Payment Trends

Table 1-1: Use of Payment Instruments by Non-banks: International Card Payment Trends, 2003 vs. 2007

Europe Co-branding Market: “Hugely Different from the U.S.”

Latin America: Growing Middle Class Generates Issuer/Partner Interest

Asia: A Patchwork Quilt

Consumer Demographics & Psychographics

Online Consumers Higher Users of Co-branded and Affinity Cards

Figure 1-3: Generational Patterns for Ownership of Affiliation/Sponsorship Cards vs. Co-branded/Affinity Cards, 2008/2009 (by percentage and index)

Non-Hispanic Whites and Asians Favor A/S Cards; Blacks and Hispanics Are Underrepresented

A/S Card Owners More Financially Secure and Financially Savvy than the Average Consumer

The Competitive Arena: Brand Networks

Credit Card Industry is Undergoing Major Changes

Payment Networks and Their Brands

Ownership and Use of Co-branded and Affinity Cards

Fewer Own Co-branded or Affinity Debit Cards

Figure 1-4: Ownership of Network Branded Co-branded and Affinity Cards, 2009

Marketing Dynamics

Decision Drivers and Information Sources

With All Those Carefully Crafted Benefits, What Really Matters to Co-branded and Affinity Card Users?

Table 1-2: Features That Drive Acquisition of Co-branded and Affinity Cards versus Standard Cards

Where Do Marketers Spend Their Money

Branches are Bastion of Card Promotion—the Buzz Word is CRM

Communicating with the Consumer via the Internet

Email Marketing: Boosting Co-branded Card Use

Small Business—Lots of Opportunity for Co-branders

Gen Y: Internet Lovers Who Embrace Co-branded and Affinity Cards

Boomers—Still Influential, But Saving More and Spending Less

Ethnic Marketing

Going Forward

Legal Challenges in the U.S. to the Credit Card Reform Act of 2009

Emerging Payment Products: A Structural Break

Mobile Payments (mPayments): Are the Golden Days of Plastic Cards Over?

Co-branding a Mobile Phone?

Social Networking

Gen Y: the Sweet Spot for Social Network Co-branded Card Marketing

But Do Social Networkers Go On to Visit Financial Sites?

Co-branding and Social Networking

The Co-branding Advantage That Issuers Crave

Sizing the Future of Co-branding in the U.S.

Chapter 2: Market Size and Trends

Consumers’ Payment Preferences

Table 2-1: U.S. Consumer Payment Preferences, In-store Payment Mix, 2003-2008

Table 2-2: Consumer Payment Preferences, Internet Payment Vehicles, 2005 versus 2008

Credit and Debit Cards in Force Continue to Show a Saturated U.S. Market

Table 2-3: U.S. Credit and Debit Cards, Transactions and Terminals, 2003-2008

Card Usage Growth Tops 12% CAGR

Figure 2-1: U.S. Debit and Credit Card Transaction Volume, 2003-2007

Figure 2-2: U.S. Debit and Credit Card Transaction Value, 2003-2007

New Cards Increase and Dormant Cards Awake

More U.S. Consumers Using Plastic for Small Payments

Forces Driving Consumer Card and Co-branded Card Usage

Global Financial Crisis

U.S. Consumers Walloped

Contracting U.S. Consumer Credit

Figure 2-3: Outstanding Consumer Credit, 1990-Q1 2009

Table 2-4: Percentage Change in Outstanding Consumer Credit, 2006-July 2009

Bankruptcies and Credit Card Defaults and Delinquencies Rising Sharply

Figure 2-4: U.S. Non-Business Bankruptcy Filings, 2000-2009(F)

Figure 2-5: U.S. Credit Card Charge Offs and Delinquency Rates (All Banks), Q1 2000-Q1 2009

Card Issuers Winnow Their Portfolios, Cut Rewards, Homogenize Reward Programs

Lasting Impact on U.S. Consumer Spending and Charging?

Figure 2-6: U.S. Retail Sales Decline Sharply between Q1-2008 and Q1-2009

Consumers Switching from Credit to Debit Cards

Reward Programs a Major Co-branded Card Market Driver

Figure 2-7: U.S. Rewards-Based Credit Cards versus General Purpose Credit Cards Without Rewards, 2003 vs. 2007 vs. 2011(F)

Sizing the U.S. Co-Branded and Affinity Card Market

Consumer Ownership and Use of Co-branded and Affiliation Cards

One in Five U.S. Cardholders has an A/S Credit Card

Table 2-5: Consumer Ownership and Use of A/S Credit Cards by Type, Summer 2008

Figure 2-8: Trends in A/S Credit Card Ownership and Use, 2004-2008

Other Surveys

Packaged Facts Custom Survey Finds More than Half of Consumers Own Co-branded or Affinity Cards

Figure 2-9: Ownership of Partnership and Sponsor Cards, February 2009

Co-branded Cards in Force

Figure 2-10: Co-branded and Affinity Credit Cards Issued in the U.S., 2003-2008

Figure 2-11: Co-branded and Affinity Credit Card Transactions, 2003-2008

Affinity Card Programs on a Plateau Since 2007

In the Wallet, Yes. But Do Consumers Use Them?

Figure 2-12: What Kinds of Co-branded and Affinity Cards are Used Regularly?

Packaged Facts Survey: 29% of Consumers Keep a Co-branded or Affinity Card in the Front of their Wallets

Figure 2-13: Ownership and Use of Partnership and Sponsor Cards, February 2009

Proprietary Bank Rewards Programs versus Co-branded and Affinity Cards

Table 2-6: Edgar Dunn Study on Consumers’ Preferred Credit Cards, 2000 vs. 2004 vs. 2006

Chapter 3: Co-branding Around the World

International Payment Trends

Table 3-1: Use of Payment Instruments by Non-banks: Check and E-Payment Trends, 2003 vs. 2007

Table 3-2: Use of Payment Instruments by Non-banks: International Card Payment Trends, 2003 vs. 2007

Table 3-3: Trends in the Use of Payment Instruments by Non-banks, 2003 vs 2007

The Global Economy, Doldrums for Some, Crisis for Others

Table 3-4: World GDP and Private Consumption Growth, 2007-2011

Table 3-5: High Income Countries GDP and Private Consumption Growth, 2007-2011

Table 3-6: Euro Zone GDP and Private Consumption Growth, 2007-2011

Table 3-7: East Asia/Pacific Region GDP and Private Consumption Growth, 2007-2011

Table 3-8: South Asia Region GDP and Private Consumption Growth, 2007-2011

Table 3-9: Middle East and North Africa GDP and Private Consumption Growth, 2007-2011

Table 3-10: Latin America and the Caribbean GDP and Private Consumption Growth, 2007-2011

Europe Co-branding Market: “Hugely Different from the U.S.”

France: Visa and MasterCard Enter Co-branding in 2007

Europe’s Co-branding Central

Spain: Separation of Credit Lines

Turkey Takes a Multi-Partner Route

Scattered Activity Elsewhere in Europe

The Gulf: Co-branders Target “Distinguished” Customers

Latin America: Growing Middle Class Generates Issuer/Partner Interest

Mexico: Aggressive Growth Until the Crisis

Asia: A Patchwork Quilt

Olympics Serve as Springboard for Chinese Market

Hong Kong’s Bank of Communications Seeks Strategic Business Partnerships for Co-branding

India: A Growth Magnet for Co-branders

Multi-Function Smart Cards Drive Taiwan’s Market

Going Their Own Way

Chapter 4: Consumer Demographics & Psychographics

About the Experian Simmons Data

Statistically Accurate Cross-Section of the U.S. Population

Simmons Survey Data Presented for 12 Credit Card Categories

Experian Simmons Surveys Cardholders Attitude on Finances

Index System

About the Packaged Online Consumer Survey

Online Consumers Higher Users of Co-branded and Affinity Cards

Figure 4-1: Generational Patterns for Ownership of Affiliation/Sponsorship Cards vs. Co-branded/Affinity Cards, 2008/2009 (by percentage and index)

A/S Credit Cardholders: First Wave Boomers Go for Travel Cards

Table 4-1: Demographic Characteristics Favoring Ownership of Affiliation/Sponsorship Cards, by Type, 2008 (index)

A/S Cardholders Tend to be Affluent

Table 4-2: Household Income Levels Favoring Ownership of Affiliation/Sponsorship Cards, 2008 (index)

Table 4-3: Household Income Levels Favoring Ownership and Use of Affiliation/Sponsorship Cards vs. Co-branded/Affinity Cards, 2008/2009 (percent)

MasterCard Has Highest Percentage of Truly Affluent

Table 4-4: Key Household Income Levels for Affiliation/Sponsorship Cards by Brand, 2008 (percent and index)

A/S Cardholders Are Well Educated, Managers, Techies, Professionals or Self-Employed

Table 4-5: Education Characteristics Favoring Ownership of Affiliation/Sponsorship Cards, 2008 (index)

Table 4-6: Education Characteristics Favoring Ownership and Use of Affiliation/Sponsorship Cards vs. Co-branded/Affinity Cards, 2008/2009 (percent)

Table 4-7: Employment Characteristics Favoring Ownership of Affiliation/Sponsorship Cards Overall and by Type, 2008 (index)

Northeastern and Pacific Homeowners Favor A/S Cards; the Southwest and Southeast Are Areas of Opportunity

Table 4-8: Regional and Homeownership Characteristics Favoring Ownership of Affiliation/Sponsorship Cards Overall and by Type, 2008/2009 (index)

Non-Hispanic Whites and Asians Favor A/S Cards; Blacks and Hispanics Are Underrepresented

Table 4-9: Racial/Ethnic Characteristics Favoring Ownership of Affiliation/Sponsorship Cards Overall and by Type, 2008 (index)

A/S Card Owners More Financially Secure and Financially Savvy than the Average Consumer

Table 4-10: Financial Attitudes of Affiliation/Sponsorship Cardholders, 2008 (index)

Travel versus Automobile versus Association Card Owners

Travel Card Users: Asian, Educated, White-Collar Professionals

Table 4-11: Demographic Characteristics Favoring Ownership of Airline/Hotel Cards, 2008 (index)

Reach Them Through the Financial Press

Table 4-12: Financial Attitudes of Affiliation/Sponsorship Cardholders Overall vs. Airline/Hotel Cardholders, 2008 (index)

Automobile Card Users: Older, Less Affluent, More Likely to Have Children

Table 4-13: Demographic Characteristics Favoring Ownership of Automotive Cards, 2008 (index)

Table 4-14: Financial Attitudes of Affiliation/Sponsorship Cardholders Overall vs. Automotive Cardholders, 2008 (index)

Association/Organization Card Users: Well Educated, Affluent Techies and Professionals

Table 4-15: Demographic Characteristics Favoring Ownership of Association/Organization Cards, 2008 (index)

Table 4-16: Financial Attitudes of Affiliation/Sponsorship Cardholders Overall vs. Association/Organization Cardholders, 2008 (index)

Factors and Attitudes Differentiating Amex, Discover, MasterCard and Visa Cardholders

A/S American Express Cardholders

Factors Differentiating A/S American Express Cardholders

Table 4-17: Demographic Characteristics Favoring Ownership of American Express Cards Overall vs. Affiliation/Sponsorship American Express Cards, 2008 (index)

Don’t Leave Home Without It

Table 4-18: Financial Attitudes of American Express Cardholders Overall vs. Affiliation/Sponsorship American Express Cardholders, 2008 (index and percent)

A/S Discover Cardholders

Table 4-19: Financial Attitudes of Discover Cardholders Overall vs. Affiliation/Sponsorship Discover Cardholders, 2008 (index and percent)

A/S MasterCard Owners

Table 4-20: Demographic Characteristics Favoring Ownership of MasterCards Overall vs. Affiliation/Sponsorship MasterCards, 2008 (index)

Table 4-21: Financial Attitudes of MasterCard Holders Overall vs. Affiliation/Sponsorship MasterCard Holders, 2008 (index and percent)

A/S Visa Cardholders

Table 4-22: Demographic Characteristics Favoring Ownership of Visa Cards Overall vs. Affiliation/Sponsorship Visa Cards, 2008 (index)

Table 4-23: Financial Attitudes of Visa Cardholders Overall vs. Visa Affiliation/Sponsorship Cardholders, 2008 (index and percent)

Chapter 5: The Competitive Arena: Brand Networks

Overview

A Note on Metrics

Credit Card Industry is Undergoing Major Changes

Payment Networks and Their Brands

Figure 5-1: Share of U.S. General Purpose Debit, Credit & Charge Card Purchase Volume, 2008 (percentage)

Figure 5-2: Share of U.S. General Purpose Credit & Charge Card Purchase Volume, 2008 (percentage)

Figure 5-3: Share of Global General Purpose Debit, Credit & Charge Card Purchase Volume, 2008 (percentage)

Figure 5-4: Share of Global General Purpose Credit & Charge Card Purchase Volume, 2008 (percentage)

Ownership and Use of Co-branded and Affinity Cards

Figure 5-5: Ownership of Network Branded Co-branded and Affinity Cards, 2009

Fewer Own Co-branded or Affinity Debit Cards

At Least Half of Each Network’s Card Holders Keep a Co-branded or Affinity Card Front of Wallet

Figure 5-6: Brand by Brand, Half of Co-branded and Affinity Cards Make It to the Front of the Wallet, 2009

Ownership and Usage of Co-branded and Affiliation Cards Brands

Table 5-1: Consumer Ownership and Use of A/S Credit Cards by Payment Network Brand and Type, 2008

American Express

Overview

Performance

Table 5-2: American Express Financials, for 2006 through Q1 2009

Table 5-3: American Express: Key Global Metrics for 2006 through Q1 2009

“Spend-Centric” Co-branding

Travel

Entertainment

Discover Financial Services

Corporate Vision—Competitive Differentiator

Overview

History

Since the Spinoff

Going Forward: Global Reach

Performance: Stop and Start Growth

Table 5-4: Discover Financials for 2006 through Q2 2009

Table 5-5: Discover: Key Metrics for 2006-2008

Co-branding: “It’s All About the Relationship”

Building Co-branding Relationships

Structuring to Manage Co-branded and Other Cards

Managing Partner Relationships

Value Beyond the Partner-Specific Reward

Creating Reward Programs that are Specific but Generic

Giving Consumers an “Edge” on Financial Literacy

Alignment of Opportunity

MasterCard Worldwide

Overview

History

MasterCard Starts 2009 with a Business Unit Realignment

Performance and Key Metrics

Table 5-6: MasterCard Financials, for 2006 through Q1 2009

Table 5-7: MasterCard Key Global Metrics for 2006 through Q1 2009

MasterCard’s Co-Branding Differentiators

Relationship Rewards Construct

Visa Inc.

History

Reorganization and Initial Public Offering

Performance

Table 5-8: Visa Financials, for 2006 through Q1 2009

Going (More) Global

Table 5-9: Visa Key Global Metrics 2008

Figure 5-7: Visa’s Regional Markets, 2008 (Share and Growth)

Visa’s Three-tiered Consumer Credit Platform

Thousands of Visa Co-branding Programs

Table 5-10: Visa’s Co-branded and Affinity Cards as of 2007

Visa’s Differentiators: Seamless Solutions

“What’s Really New and Different”

Brand Globally but Co-brand Locally

Building a More Holistic Relationship with the Retailer

In the U.S. Getting More Out of What They Have

In Europe

Getting the Partners on Your Side

For the next 2-5 years?

Chapter 6: The Competitive Arena: Banks and Non-Bank Issuers…………

Figure 6-1: Market Share of U.S. General Purpose Credit Card Issuers Ranked by Purchase Volume, 2008

Top Co-branded and Affinity Card Issuers

Bank of America

Overview

Acquisition Spree

Performance

Table 6-1: Bank of America: Card Services Credit Card Performance

“Incredibly Stiff Headwinds”

Table 6-2: Global Card Services: Q2 2009 Results

Table 6-3: Global Card Services: Key Statistics

Beyond the Card: The Birth of Affinity Banking

39% of Q2-2009 Deposits from Affinity Relationships

A Great Selling Machine

Figure 6-2: BofA’s Multi-Channel Marketing, 2007

Table 6-4: Affinity Program Success Stories

Figure 6-3: BofA Leverages Its Channel Diversity to Balance Growth and Profitability, 2008

JPMorgan Chase

Chase Card Services

Performance

Table 6-5: Card Services Performance

Numerous Affinity Organizations and Co-brand Partners

Table 6-6: Chase Obligations Under Affinity and Co-brand Programs

Co-branding is Serious Business at Chase

Co-brand Outperforms Chase’s Proprietary Programs

Figure 6-4: Chase Brand versus Co-brand/Affinity Performance

Concentrating on the Biggest Partnerships

Table 6-7: A Chase Affinity Card Sampler

Barclays PLC

Performance

Table 6-8: BarclayCard Performance, 2006-2008

Table 6-9: Key Facts about Barclaycard, 2008

Focus on Co-branding

Success in the U.S.

U.S.-U.K. Cross Fertilization

GE Consumer (né GE Money)

Expands Co-branded Card Portfolio

Performance: Shrinking Receivables—Rising Defaults

Table 6-10: GE Capital Consumer (formerly GE Money) Financials, for 2006 through Q1 2009

Table 6-11: GE Capital Consumer Delinquencies Q2 2008 versus Q1 & Q2 2009

From Pure Private Label to Co-branding Giant

Table 6-12: Dual Card Launches and Assets, 2003-2006

Table 6-13: Examples of GE’s Co-branded and Affinity Cards, 2009

GE’s Global Co-branding Reach

But GE Doesn’t Love its Credit Card Business

Capital One

Performance

Table 6-14: U.S. and International Card Performance, 2006-2009

As Other Issuers Pull Out of the Co-branding Arena, Capital One Sees Opportunity

Card Lab - Personalizing Plastic

Capital One Creates DIY Affinity Programs for Non Profits

How it works

USP for Smaller Non-Profits

Table 6-15: Capital One Co-branded Credit Cards

Smaller Financial Services Companies Enter the Co-branded and Affinity Card Space

Western Alliance Bankcorp Looks to Co-branded and Affinity Cards to Offset Real Estate Woes

UMB: The First Do-it-Yourselfer

Chapter 7: Marketing Dynamics

Decision Drivers and Information Sources

Co-branded Card Candidates Resonate with Direct from Partners and Sponsors

Table 7-1: Sources of Information Especially Important to Choosing Last Card for Co-branded or Affinity Card Owners versus Owners of Standard Cards

Table 7-2: Sources of Information Especially Important to Choosing Last Card for Consumers Who Use Co-branded or Affinity Card Most Frequently versus Standard Cards

Trust in Advertising: ’Round the World It’s Word of Mouth

Figure 7-1: Forms of advertising ranked by changes in levels of trust from April 2007 to April 2009

With All Those Carefully Crafted Benefits, What Really Matters to Co-branded and Affinity Card Users?

Table 7-3: Features That Drive Acquisition of Co-branded and Affinity Cards versus Standard Cards

Rewards and Discounts More Important for Acquisition and Frequent Use to Co-branded and Affinity Card Owners than to GPCC Owners

Table 7-4: Features That Drive Acquisition and Use of Co-branded and Affinity Cards versus Standard Cards for “Most Frequent” Users

Table 7-5: Considerations in the Acquisition and Use of Co-branded Retailer, Travel, Entertainment and Affinity Cards

Hanging on to the Old School Tie

Table 7-6: Students and Alumni Go for Organization and Affiliation Cards

. . .And Which Ones Don’t? Rewards Program Cost Cutters Want to Know

Where Do Marketers Spend Their Money

Direct Mail Offers Plunging

Figure 7-2: Direct Mail Credit Card Offers, Synovate versus Mintel, 2005-2007

Shift to Fee-based and Co-branded Cards

Spending on Measured Media Fell Off the Cliff in Q4-2008—It’s Still Falling

Figure 7-3: Measured Media Spending, 2007, 2008 and Q1 2009

Word of Mouth[watering] Marketing Spending Bucks the Trend

Print Media: Co-branded Card Holders Read the Financial Pages

Table 7-7: Card Holder Attitudes: I Read the Financial Pages of My Newspaper

Table 7-8: “I Find Ads for Financial Services Interesting”

Branches are Bastion of Card Promotion—the Buzz Word is CRM

Figure 7-4: Bank of America’s Card Sales Mix By Channel, 2004-2007

Communicating with the Consumer via the Internet

Online Advertising

Email Marketing: Boosting Co-branded Card Use

Emerging Email Marketing Paradigm

Viral Email Marketing

Segments, Segments, Segments

Small Business—Lots of Opportunity for Co-branders

Gen Y: Internet Lovers Who Embrace Co-branded and Affinity Cards

Boomers—Still Influential, But Saving More and Spending Less

Ethnic Marketing

Table 7-9: U.S. Population Projections: Share by Ethnic Group

Table 7-10: Penetration of Co-branded and Affinity Cards by Ethnic Group

Asians Embrace Co-branding

African Americans: Worldview Considerations

Hispanics Underserved - Try Mobile Outreach

Multi-racial Opportunities Loom

Figure 7-5: Growing Multi-Racial Population in the U.S

Chapter 8: Going Forward

Legal Challenges in the U.S. to the Credit Card Reform Act of 2009

Table 8-1: Key Provision of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009

Impact on Consumers and Issuers

Impact on Co-branding Partners

Chill Wind Blows on Overdraft Fees

Are Interchange Fees Next? Co-branding Partners Square Off Against Banks and Brand Networks

Across the Pond

Emerging Payment Products: A Structural Break

Contactless Cards

Smart Cards

Mobile Payments (mPayments): Are the Golden Days of Plastic Cards Over?

Co-branding a Mobile Phone?

Social Networking

Top Social Networking Sites

Table 8-2: Top Social Networking Sites

Gen Y: the Sweet Spot for Social Network Co-branded Card Marketing

Figure 8-1: Front-of-Wallet Use of Co-branded and Affinity Cards by Age Cohort

But Do Social Networkers Go On to Visit Financial Sites?

Table 8-3: Method of Gathering Information to Identify Choices for a Potential Purchase

Tweetterers Don’t Fly to Financial Services Sites Either

Women Turn to Blogs for Info, Advice, Recommendations

Co-branding and Social Networking

Whither Co-branding

The Need for Alternate Channels

Learning from Past Mistakes

U.S. Co-branding Programs: All Grown Up or Still Growing?

Segments: Growing and Emerging

Helping the “Bruised Consumer”

Rewards Programs: Issuers Cut Back as Beleaguered Consumers Increase Reliance

Table 8-4: U.K. Credit Card rewards in 2005, 2008 and 2009

Are Experiential Rewards Relevant in a Downturn?

The Tension Between Co-branded and Proprietary Bank Rewards Programs

The Co-branding Advantage That Issuers Crave

To Live Long and Prosper, Co-brand Partners Need to Be Actively Engaged in Their Programs

Sizing the Future of Co-branding in the U.S.

Figure 8-2: Rewards Cards vs. Standard Cards as a Percentage of Total Credit Cards, 2007-2012

Table 8-5: World Bank Estimates of U.S. GDP and Private Consumption 2007-2011

Figure 8-3: Co-branded & Affinity Card Forecast, Cards Outstanding (Total/Per Cardholder), 2007-2012

Figure 8-4: Co-branded & Affinity Card Forecast, Transaction Volume and Value, 2007-2012

Assessing the Game Changers