Fiserv's UChoose Rewards program lets small financial institutions punch above their weight and compete with the large national banks in an area of growing importance to consumers: debit and credit card loyalty programs.
By pooling the account volumes of many financial institutions these smaller companies can access a network of national, local and online merchants; in some cases, they can offer better reward rates and redemption terms than national banks. According to Fiserv, more than 50 percent of the UChoose Rewards online merchant offerings exceed those of big banks.
"We realized a lot of our clients did not have enough scale to do a merchant-funded program, and we saw this as an opportunity to compete with the big banks," says Andy Brown, Fiserv's vp of loyalty solutions.
A year after launching the program in November of 2008, more than 230 banks had signed up and seen concrete results. After registration, the average number of transactions per card jumped 17 to 53 percent, and the average spending per card jump 16 to 39 percent, Fiserv reports. Besides the steppe-up transaction and spending volume among current card holders, another sign of the program's success is that some older customers who never bothered to get a debit card are now asking for them.
Patricia Hewitt, director of debit advisory services for Mercator Advisory Group, says "The nice thing about UChoose is it allows small financial institutions to deliver a customized program for their target demographic - points, cash back, merchant funded discount - and put it together in a single package. So they can craft programs without crafting multiple relationships."
The UChoose Rewards program also builds brand by driving consumers to the banks' Web sites. Many banks update their rewards offerings throughout the month, prompting some customers to check in frequently. It's typical to see an additional five-to-eight visits per month, Brown says, and those extra brand impressions help build and reinforce customer loyalty.