With the Durbin Amendment causing all sorts of changes to banks’ debit rewards programs, BBVA is choosing a different route, unique for banking but becoming ubiquitous for consumers and merchants.
Debit rewards have been a really sticky situation for quite some time now ever since the then-pending legislation was introduced. Chase (NYSE: JPM) was in the spotlight when it announced in November the impending demise of debit rewards due to the interchange fee caps, since the program had been financed in part by such fees.
MyBankTracker.com has an extensive — and growing — list of banks and the updated status of their respective rewards program. BBVA Compass Bank is a unique option as they have chosen to transition their rewards program. Their response to this question was the following corporate statement:
BBVA Compass has worked really hard to maintain the key aspects of our debit rewards program, which our customers find valuable, however, recent regulatory reform has forced us – like many other financial institutions – to reevaluate our points system. Rather than dropping our reward program like some of our competitors, we will be transitioning to a merchant program which allows customers to build points based on participating retailer offers. With hundreds of online and in-store local, regional and national merchants taking part, we are confident that our customers will be able to take advantage of offers from their favorite retailer.
With our transition to a strong merchant program that provides our customers the opportunity to earn more points in a single transaction than ever before, we feel that we have honored our customers request for continued access to rewards programs while adapting to changes in the regulatory environment. These changes become effective September 20, 2011. Points that customers have earned through the effective date will not be impacted.
With the future of merchant rewards looking bright, this is definitely a step in the right direction. It seems almost every company is making a bid into the field of “merchant rewards.” The term here is a bit all-encompassing, as it refers to rewards retrieved from a specific merchant as well as daily deals delivered to your phone or computer, which you can activate for discounts at participating merchants.
American Express, Intuit and edo Interactive are just a few of the companies who have developed programs allowing consumers to find nearby deals and earn rewards from merchants. They distinguish themselves from one another by offering different deal management and redemption platforms. American Express “Link, Like, Love” utilizes Facebook (they have something similar with Foursquare), while edo Interactive Prewards pushes offers to consumers via the internet or text.
Merchant rewards will not “replace” debit rewards, but they seem to be a much better option for all involved.