Co-branded cards have been in vogue in India since the mid-1990s. A recent PwC study of popular co-branded cards in India indicates travel as the most prolific use case followed by fuel, e- tail and retail shopping.
Co-branded card - the value proposition for stakeholders
For Issuers
Access to focused customer base
Increased average spends per card
Improved customer stickiness
For Partners
Contribution to topline and bottomline with shared revenues
Better brand visibility
Enhances customer loyalty
Co-branded cards are typically characterized by high customer stickiness (benefits and rewards are vendor-specific), higher spends, better activation (low dormancy) and lower acquisition costs (much more targeted).
Major Revenue Vs Cost
Joining Fees & Annual Fees - Revenue
Discount / voucher expenses and Reward redemption - Expenditure
Marketing Expense - Shared Cost
Our discussion with practitioners suggests that new partnership models are emerging in the co-branded space as issuers look for better targeting of customers and smarter acquisition.Although co-branding has conventionally been popular in the credit cards business, banks are now beginning to extend co-branded tie-ups to debit cards and prepaid cards.
