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Credit card rewards go mobile

See something you like at Best Buy?
Pull out your mobile and use points

Credit card rewards go mobile
Banks and credit card issuers are among the most active and innovative financial services firms in the mobile space. In our recent report, Money on the Move: Mobile Finance Review 2011, we found that 89% of the firms tracked by Corporate Insight’s Bank and Credit Card Monitor services offered their clients mobile access through an optimized mobile site, app, or both.

Client expectations have only risen for mobile capabilities offered by banks and credit card issuers, as new features such as remote deposit capture, peer-to-peer payments, and SMS commands gain popularity. Late this summer, competition picked up in a new area--credit card rewards. Clients with Citi, Discover, and American Express cards can now redeem rewards points from their mobile device. In particular, Citi stands out with in-store merchandise redemption options from partner Best Buy.

Rewards programs can be a good selling point for credit card companies. Until recently, though, their existence has barely been acknowledged on the firms’ mobile platforms. In most cases, clients can simply view miles, points, or cash-back balances on their mobile devices.
Citi’s Innovative New App
Citi made by far the most striking advances in mobile rewards redemptions. In August, the program launched dedicated iPhone and Android apps for its ThankYou rewards program with merchandise partner Best Buy.

As with online redemptions, clients can browse available items and order them to be shipped to their home address. The app is also useful when visiting a Best Buy store. The app integrates in-store pickup of redemption merchandise, a feature ThankYou only recently added online. When shopping in a Best Buy store, clients can also scan a bar code and pay with their rewards points.

Other redemption types are currently lacking. It’s also inconvenient that ThankYou rewards clients must download and log in to a separate app from the main card management platform. Still, Citi should be commended for designing its app for new mobile uses instead of just creating a “lite” version of the rewards site.
App updates
While their new capabilities are much simpler than Citi’s, both Discover and American Express have helped break ground by updating their current mobile apps to enable basic rewards redemptions.

In August, Discover added cashback redemptions to its iPhone, Android, and BlackBerry apps. Clients can use their Cashback Bonus for gift certificates, statement credits, or direct deposit to linked checking or savings accounts, the three main redemption options offered by the card. Unfortunately, similar capabilities have not been rolled out for miles card holders.

American Express followed suit in September with updates for its iPhone and Android apps (the two platforms the firm’s mobile apps support). Now, clients can not only view their Membership Rewards balance, but also browse and redeem points for gift cards.

So far, this is the only one of AmEx’s extensive redemption options available from a mobile device. However, the app indicates that merchandise redemptions are coming soon.

Other options, such as travel booking, are much more complex and appear not to be immediately in the works.
Click on image to enlarge    

Looking ahead…
Financial institutions often take a “me too” approach to new technologies, and mobile is no exception. As such, we expect this new trend to continue. Most firms will likely take the same first steps as Discover and AmEx, adding certain straightforward redemption options--cashback and gift card-- to their mobile apps. We hope that they also look to emulate Citi ThankYou and consider what new possibilities mobile presents when designing new rewards tools.


About the author
Dan Wiegand is a senior analyst on Corporate Insight's Consulting Services team. He joined the firm in 2006 after graduating from Harvard University. He has performed extensive research in the mobile space with a focus on banking and investing platforms. Corporate Insight authors contribute to various multi-author blogs on, including Tech Without Hype and Social Media: Banks' New Frontier

Tagged under Payments,

Dan Wiegand

Dan Wiegand is a Senior Analyst with the consulting services department at Corporate Insight. After graduating Harvard University, he joined the firm in 2006 with the newly-launched Annuity Monitor. Wiegand’s project work with the consulting department in the past few years includes account opening, online security, and mobile applications.

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