MFDN Goes Underground

Mercator Overviews

by Mercator Advisory Group June 17, 2011 3:03 pm0

Ally Bank seems to be bucking the trend as they announce the launch of their new Ally Perks program. While many issuers appear to be planning to drop debit rewards programs due to the anticipated cut in debit interchange fees stemming from the Durbin Amendment, this cash back program might get consumer attention. But, this is not a cash back program funded by the bank; it is a merchant funded discount program and may represent a new variation on the traditional MFDN strategy.

“There are no points or cash back balances to track, no coupons to print, and no redemption thresholds to meet. Better yet, customers don’t have to sign up for a particular offer – it will also be automatically be applied to an eligible purchase whether or not the customer knows about it.

Under participation in Ally Perks, customers will earn money back when they shop at particular retailers online or in-store, depending on the offer. Occasionally, Ally Perks may present personalized offers based on past purchases and spending habits.”

So, consumers simply use their Ally Bank debit card as they normally would and sometimes they’ll get cash back. It’ll be interesting to see the back end communication strategy of the program and one wonders how quickly consumers will begin to see offers pushed to them. It would seem that the program might have more impact if the consumer was informed at the POS that they qualified for a discount. Surprise! You Win! But, perhaps we’ll be seeing that soon enough if merchants decide to get more involved on the front end of the transaction.

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