EconPapers    
Economics at your fingertips  
 

How Effective Are Rewards Programs in Promoting Payment Card Usage? Empirical Evidence

Santiago Carbo Valverde () and José Manuel Liñares-Zegarra ()
Additional contact information
José Manuel Liñares-Zegarra: UNIVERSITY OF GRANADA FEDERAL RESERVE BANK OF CHICAGO

No 201059, Working Papers from Fundacion BBVA / BBVA Foundation

Abstract: Card issuers have mainly relied on rewards programs as their main strategic driver to increase debit and credit card payments. However, there is scarce evidence on the effectiveness of rewards programs. This working paper offers novel evidence on two key issues in this area using unique data from a comprehensive survey of cardholders: 1) it measures the impact of incentive (rewards) programs on the use of debit and credit cards, and 2) it quantifies the economic impact of these programs in terms of the substitution of cash by cards for payment purposes. The results show that rewards may significantly modify preferences for card payments. The evidence also suggests that the economic impact of rewards programs varies significantly across different type of rewards and across merchant activities. These incentives seem to be more effective on average for debit cardholders than for credit cardholders.

Keywords: Payment cards; rewards; preferences; merchants; cardholders. (search for similar items in EconPapers)
Pages: 46
Date: 2009-02
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.fbbva.es/TLFU/tlfu/ing/areas/econosoc/p ... index.jsp?codigo=412
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.fbbva.es/TLFU/tlfu/ing/areas/econosoc/publicaciones/documentos/fichadoc/index.jsp?codigo=412 [301 Moved Permanently]--> https://www.fbbva.es/TLFU/tlfu/ing/areas/econosoc/publicaciones/documentos/fichadoc/index.jsp?codigo=412)

Related works:
Journal Article: How effective are rewards programs in promoting payment card usage? Empirical evidence (2011) Downloads
Working Paper: How effective are rewards programs in promoting payment card usage? empirical evidence (2009) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fbb:wpaper:201059

Access Statistics for this paper

More papers in Working Papers from Fundacion BBVA / BBVA Foundation Contact information at EDIRC.
Bibliographic data for series maintained by Fundacion BBVA / BBVA Foundation ().

 
Page updated 2020-06-30
Handle: RePEc:fbb:wpaper:201059