Published: July 23, 2024 | Updated: July 23, 2024
Read time: 3 minutes
To help financial institutions keep track of the latest trends in financial sector loyalty, Mastercard conducted an analysis of ~200 leading and emerging fintech companies using the new functionality in its recently updated Market Trends New Payment Experience solution.
You can now preview and compare full user experiences, or access detailed company profiles and insight documents, to help you develop a winning payments strategy.
Loyalty programs as a top business priority
Customer loyalty and engagement programs have come into focus as key components of growth for financial institutions.
NPE best practice loyalty offerings
However, the factors driving customer spend, engagement and loyalty are evolving and becoming increasingly multifaceted.
Mastercard’s analysis of 185 leading and emerging fintech companies around the world, featured in the New Payment Experience solution (NPE), revealed 7 best practice loyalty offerings in the sector:
Card-linked offers
- Card-linked offers are the most widely available loyalty solution in the NPE
- 41% of fintechs in the study offer rewards linked to payment cards
- Case study: A card-based payment instrument issuer (CBPII) based in the UK gives clients the option to save money when they travel. By linking a personal bank account to the CBPII’s debit card, clients can save at least 85% on FX markup fees for every international transaction.
Financial education
- Financial education is the second most popular loyalty tool in the NPE, offered by 32% of companies in the study
- These initiatives can complement and reinforce other loyalty programs and are most targeted at younger customer demographics who are unbanked or underbanked
- Case study: A US-based debit card and financial management solution offers educational resources aimed at teenagers and families, including interactive learning experiences through games and podcasts, as well as collaborations with schools to promote youth financial literacy.
Cashback
- Cash rewards remain a significant driver of customer loyalty and spend
- 27% of companies in the study offered cashback incentives
- Case study: A US-based corporate spending and expenses management platform offers a cashback solution that allows all customers in Canada, US, UK and Europe to earn 1% uncapped cashback on all payments made using their prepaid card.
‘Refer a Friend’
- ‘Refer a friend’ is the third most widely available loyalty initiative in the NPE
- 22% companies in the study offer this feature
- Case study: An EU-based buy now, pay later solution offers customers a €50 discount code to be used within 30 days of receipt for every three friends who make a first purchase after entering the ‘Refer a Friend’ promotional code.
Rewards Program
- Rewards programs continue to be one of the top tools used by companies to retain customers
- 22% companies in the study offered this incentive
- Case study: a Japan-based mobile payment solution operates a rewards program offering customers points for every purchase made through their platform. Customers can use points at partner businesses to redeem offers and discounts.
Discounts
- Discounts were identified as the top tool for retaining customers in the retail sector
- However, direct transaction discounts are only offered by 17% of companies in the study
- This suggests a preference for financial incentives that promote a company’s own products and services rather than those of third-party partners
- Case study: A Canada-based challenger bank distributes discount codes through its partners and affiliations, providing monetary benefits when a customer opens a new account.
Gift Cards
- Gift cards remain a large and growing market globally
- Nevertheless, they are only offered by 6% of companies in the study, suggesting a shift away from this solution
- Case study: A Brazilian digital bank allows customers to purchase gift cards and receive a percentage of cashback directly into their account.
View, analyze and compare some of the world’s most effective and innovative financial technology services companies in loyalty and beyond with Market Trends New Payment Experience.
