How effective are rewards programs in promoting payment card usage? empirical evidence

Santiago Carbó-Valverde and José Liñares-Zegarra
Authors registered in the RePEc Author Service: Santiago Carbo Valverde

No 1141, Working Paper Series from European Central Bank

Abstract: Card issuers have mainly relied on rewards programs as their main strategic driver to increase electronic payments. However, there is scarce evidence on the effectiveness of rewards programs. This paper offers novel evidence on two key issues: i) it measures the impact of rewards programs on the use of payment cards; and ii) it quantifies their economic impact in terms of the cash substitution. The results show that rewards may significantly modify preferences for card payments, their economic impact vary significantly across types of rewards and merchant activities and rewards seem to be more effective on average for debit cardholders. JEL Classification: G20, D12, E41

Keywords: cardholders; merchants; payment cards; preferences; rewards (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: How effective are rewards programs in promoting payment card usage? Empirical evidence (2011)
Working Paper: How Effective Are Rewards Programs in Promoting Payment Card Usage? Empirical Evidence (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20091141

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