SHREWSBURY, Mass.—Debit card reward programs, once considered a dying breed as the Durbin rules took hold, are still going strong at many of the nation's largest financial institutions, a new study shows.
According to a new report from the Mercator Advisory Group, a majority of the country's top banks and credit unions offer debit card reward programs: 14 of the 25 largest banks and 13 of the 25 largest credit unions.
"Debit cards are an important product for financial institutions because it's that daily representation of the bank's brand to their customers, so they want to make sure their customers continue to use their debit cards," Sarah Grotta, Mercator's director of debit advisory service, told NBC News.
What appears to have revived debit rewards, NBC said, is that the checking account is no longer a “must-have” financial product. Therefore, to keep checking customers in the fold, FIs are offering attractive debit rewards programs.
Mercator found that about 90% of American adults have a checking account, a drop of 5% since 2012. The biggest declines took place in two of the most sought after customer groups — affluent households and young adults, the report noted.
“It seems these loyalty programs can motivate the use of debit cards,” NBC stated. “One in three people with a debit card that offers rewards told Mercator they paid with their card because of the rewards.”