Prepared for Derek F. | Delivered October 6, 2020
Credit Cards Partnerships: Business Model
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To have a broad understanding surrounding the credit card partnership business model. An ideal response would include - how to start the business, challenges, or threats, and opportunities.
There are three ways for companies wanting to start a credit card business -
, or by starting a card-issuing company from scratch.
Starting a credit card business partnership
Companies like Visa does not issue credit cards but helps companies create a
. Their programs are particularly designed to help merchants attract new customers, increase sales, and deliver value.
A co-branded credit card is issued in
partnership with a retailer
of consumer goods or services issues in partnership with a particular credit card issuer or network. The
co-branded credit card
usually bears the logo of both parties- one is the merchant and the other is bank or card network such as Visa, MasterCard, American Express, etc.
Credit Card Partnership with Visa
The process of
getting a credit card
with a company name involves a 5 step process.
The first step involves
developing a business plan
and outlining the estimated size and demographics of the existing customer base.
Companies wanting to
co-brand with Visa
should also outline the benefits, pricing, and promotion that distinguishes the co-branded credit card.
The third process involves
determining the financial institutions
that fit with the company’s marketing strategy.
Further companies should issue a
request for proposal
(RFP) to determine the institution they want to partner with.
The last step involves
negotiating the contract
with the issuer of the company’s choice.
Role of Visa in Co-branded card program
The role of Visa involves supporting its
through advertising and marketing programs that encourage the use of Visa cards.
Co-branded credit cards Market
According to Packaged Facts, about
of American Express, MasterCard, or Visa cardholders use
According to the United States Co-Branded and Affinity Cards Market Report 2019, co-branded credit cards generated
in purchase value and with an
increase of 7.9%
in value from 2016.