Nearly 85% of consumers said they’d be interested in paying with points if the option was offered. That’s according to a new survey, which found that there’s been a significant increase in consumer interest compared to previous years.
According to the research, which polled 1,000 U.S. consumers, many respondents said they’re willing to switch to credit cards for their enhanced pay with points benefits. In fact, 76% indicated a readiness to make the switch.
Interestingly, the inclination is more pronounced among retail card holders, which demonstrates a stronger desire to change cards for the advantages offered compared to bank cardholders.
Key Findings
What many consumers look for is the ability to save money and combat inflation by reducing purchase expenses.
When it comes to their preferred redemption locations, the largest share of respondents (62%) said they favor grocery stores, followed by online retail (56%), gas stations or convenience stores (52%), and fast-food restaurants (45%).
More than a third (47%) of respondents said they have paid with points at least once, while slightly more (43%) said they were either aware of this payment option, but haven’t experienced it—or were just unfamiliar with it.
Loyalty Is a Driving Force
As previously mentioned, loyalty and rewards are what’s driving card choice.
“The rewards program space has become more crowded as new players enter the field, and with it, consumers now have set a higher bar for which programs are worth their time and attention,” said Neil Kapur, Partner at TTV Capital. “Banks need a way to differentiate the value they offer to their customers, and to do so, they need to participate in e-commerce in a more meaningful way.”
During a PaymentsJournal podcast last year, Jeri Scheel, Senior Director of Product Strateg at Fiserv spoke to how rewards have become an expected feature and are no longer viewed as just another perk.
“Whether it’s consumers or businesses, a credit card is expected to have rewards,” Scheel said. “But the real opportunity for financial institutions is to think about how to tie in rewards on the debit side because it can really set them apart from their competitors.
“They’re a differentiator and determine which card gets top-of-wallet status. In fact, research has shown that 68% of people with a credit card have more than one, 90% of those have a go-to (card) that they use most often. And a majority, 71%, of multiple card users choose their credit card for the opportunity to accumulate rewards.”