What is a co-branded credit program and does your company need one?
Co-branded credit cards are a type of credit card that is created through a partnership between a retail brand and a credit card issuer. These cards offer additional higher reward incentives for brand purchases and allow cardholders to redeem rewards within the brand. With a co-branded credit card, the merchant or brand's logo appears on the credit card while the card issuer and network do the behind-the-scenes work of processing transactions and calculating rewards.
In this article, we will explore why should a company issue a co-branded credit card and which industries would benefit from issuing a co-branded credit card.
What can my company benefit from a co-branded credit card program?
- Brand Awareness and Credibility: A co-branded credit card can increase brand awareness and credibility. By offering financing under your own brand, current and prospective customers will view your business as a prosperous and established company that they can rely on.
- Customer Loyalty: Co-branded credit cards incentivize repeat purchases and build customer loyalty. By offering a financing processing portal that customers can securely join, along with loyalty reward programs and exclusive sales for credit cardholders, customers will have an added incentive to make purchases at your business.
- Customer Information: A co-branded credit card portal provides valuable information about your customers. By storing information about the purchases your customers make from you, you can target customers with preference-specific advertising and even share or sell their information to business partners if the customer agrees.
- Increased Sales: Offering co-branded financing can boost sales, especially for businesses that sell high-end, luxury, or expensive products. By making the product more accessible to customers through financing, you can increase sales and grow your business.
- Security Interest in Collateral: Some co-branded credit card contracts may grant the lender a security interest in purchases and give the lender the ability to repossess them or negotiate with a bankruptcy debtor over a payoff of the collateral.
Industries That Would Benefit from Issuing a Co-branded Credit Card
MLM (Multilevel Marketing Companies) companies: By issuing a co-branded credit card, MLM companies can not only incentivize their customers to frequent their business more often and increase brand awareness, but also provide benefits for the company owners. One of the key benefits is the ability to save on costs associated with sending commission payments to their sales affiliates. The co-branded credit card can also help to build customer loyalty by offering rewards that can only be redeemed within the MLM company.
Financial Firms: Financial firms, such as stock brokers, can also benefit from issuing a co-branded credit card. This can help to increase customer loyalty and differentiate their firm from competitors. The co-branded credit card can also offer benefits such as cashback rewards and special financing options for stock purchases.
Crypto Exchanges: Crypto companies can use a co-branded credit card as a way to encourage customers to use their cryptocurrency for everyday purchases. The co-branded credit card can offer rewards for using the cryptocurrency and help to increase adoption and usage of the currency.
Other Industries: Other industries that could benefit from issuing a co-branded credit card include retail stores, airlines, hotels, and rental car companies. These industries can use the co-branded credit card to increase sales, attract new customers, and build customer loyalty. The co-branded credit card can also offer additional benefits such as discounts, loyalty rewards, and travel perks.
If you're unsure if your company should launch a co-branded credit card, our sales representative is here to help. Don't miss out on the opportunity to increase customer loyalty, build brand awareness, and grow your business.