Affinity cards are more commonly associated
with large issuers, but some smaller players are now targeting the
space overlooked by the big banks. Charles Davis reports
on how affinity programmes are being offered to smaller
organisations such as member-based groups and non-profits.
with large issuers, but some smaller players are now targeting the
space overlooked by the big banks. Charles Davis reports
on how affinity programmes are being offered to smaller
organisations such as member-based groups and non-profits.
The affinity card market in the US is well
served at the high end, with hundreds of cards for everything from
university alums to religious sects. Having sorted through the
largest associations in search of affinity partners, the biggest
affinity issuers have left a small but highly devoted niche of
affinities untouched.
served at the high end, with hundreds of cards for everything from
university alums to religious sects. Having sorted through the
largest associations in search of affinity partners, the biggest
affinity issuers have left a small but highly devoted niche of
affinities untouched.
UMB, a Kansas City-based issuer, has teamed
with CardPartner, a New York-based company that markets credit
cards, to target the affinity market overlooked by the big banks.
The two have joined forces to offer Visa Platinum affinity credit
card programmes to the thousands of small non-profits and
member-based groups underserved by the large credit card
banks.
with CardPartner, a New York-based company that markets credit
cards, to target the affinity market overlooked by the big banks.
The two have joined forces to offer Visa Platinum affinity credit
card programmes to the thousands of small non-profits and
member-based groups underserved by the large credit card
banks.
CardPartner director of sales and marketing
Douglas Davis said the company can reach further down the affinity
market than the larger credit card banks because it offers a suite
of proprietary online tools that non-profits and member groups use
to design and offer their own Visa Platinum credit card.
Douglas Davis said the company can reach further down the affinity
market than the larger credit card banks because it offers a suite
of proprietary online tools that non-profits and member groups use
to design and offer their own Visa Platinum credit card.
UMB, in turn, makes the credit decisions,
issues the card, and manages account relationships. George
Schmelzel senior vice-president of card services at UMB Bank, said
his long relationship with Serverside, parent of CardPartner, led
to the decision to enter the affinity market.
issues the card, and manages account relationships. George
Schmelzel senior vice-president of card services at UMB Bank, said
his long relationship with Serverside, parent of CardPartner, led
to the decision to enter the affinity market.
Smaller affinities looking to partner
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“For several years now, there is not a week that goes by that I
don’t get a call from a smaller affinity looking for a partnership,
and so I knew that opportunity was there, and when CardPartner came
along with the idea, we saw it as a great way to expand the
portfolio,” Schmelzel said.
For UMB, the 40th-largest Visa issuer in the
US, Schmelzel said the affinity programme could be a fairly
significant channel for growth.
US, Schmelzel said the affinity programme could be a fairly
significant channel for growth.
“We really like it because it has some real
breadth, takes us outside of our banking centres and gives us a
large assortment of new partners,” he added.
breadth, takes us outside of our banking centres and gives us a
large assortment of new partners,” he added.
CardPartner’s Davis said the partnership allows
smaller affinity groups to receive the same sort of service as the
bigger players, thanks to the cost efficiencies of the internet as
a marketing channel.
smaller affinity groups to receive the same sort of service as the
bigger players, thanks to the cost efficiencies of the internet as
a marketing channel.
“Our model is designed to minimise costs
through electronic marketing, online applications and card issuance
on demand, all of which drives down the break-even point for us,”
Davis said.
through electronic marketing, online applications and card issuance
on demand, all of which drives down the break-even point for us,”
Davis said.
“To make it as easy for our partners as we can,
we have built a turnkey kit they can use to market the cards. All
of this means we can see a business case for affinity cards for
groups with just a few thousand members.”
we have built a turnkey kit they can use to market the cards. All
of this means we can see a business case for affinity cards for
groups with just a few thousand members.”
An affinity credit card promotes a group’s
cause, allows supporters to express their affinity for that cause,
and pays the group a finder’s fee and a portion of charge
volume.
cause, allows supporters to express their affinity for that cause,
and pays the group a finder’s fee and a portion of charge
volume.
It can also be a sign of success for a
non-profit’s members, said Lori Mogan, manager of corporate and
foundation relations for Guide Dogs for the Blind, a non-profit
that provides assistance dogs for visually impaired persons.
non-profit’s members, said Lori Mogan, manager of corporate and
foundation relations for Guide Dogs for the Blind, a non-profit
that provides assistance dogs for visually impaired persons.
Mogan said that Guide Dogs went searching for
an affinity issuer a couple of years ago, but could not get anyone
to pay attention to them.
an affinity issuer a couple of years ago, but could not get anyone
to pay attention to them.
“We thought we had a good programme with a
great message, and to our dismay, they didn’t want to respond to
us,” Mogan said. “We have between 40,000-80,000 constituents, and
we appeal even more broadly to dog lovers in general, but we could
get no one’s attention until this programme came along.”
great message, and to our dismay, they didn’t want to respond to
us,” Mogan said. “We have between 40,000-80,000 constituents, and
we appeal even more broadly to dog lovers in general, but we could
get no one’s attention until this programme came along.”
Davis – whose family had raised Guide Dog
puppies when he was a child – made Guide Dogs one of his first
sales calls when the UMB affinity partnership launched, and now the
non-profit has been issuing cards for a month.
puppies when he was a child – made Guide Dogs one of his first
sales calls when the UMB affinity partnership launched, and now the
non-profit has been issuing cards for a month.
Mogan said Guide Dogs isn’t fixated on revenue,
although some would be nice.
although some would be nice.
“We get more out of it every time someone takes
it out of their purse,” she said. “We have found the cards are a
conversation starter, just like our dogs. And when people find out
more about what we do as an organisation, they tend to support
us.”
it out of their purse,” she said. “We have found the cards are a
conversation starter, just like our dogs. And when people find out
more about what we do as an organisation, they tend to support
us.”
Affinity value-added features
CardPartner and UMB have added several new features to the affinity
card offering, including the ability to allow groups to offer
members and supporters up to five design choices.
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By GlobalDataThe firms can monitor each of the designs to
see which generates the greatest response, and Davis said he can
swap in a design in a single business day or less.
see which generates the greatest response, and Davis said he can
swap in a design in a single business day or less.
In addition, unlike the larger affinity
programmes, groups never turn over their mailing lists. All contact
is between the group and its members or supporters. The groups earn
a $50 cash bonus for each card activation plus a percentage of the
monthly spend charged to each card paid to the group monthly.
programmes, groups never turn over their mailing lists. All contact
is between the group and its members or supporters. The groups earn
a $50 cash bonus for each card activation plus a percentage of the
monthly spend charged to each card paid to the group monthly.
For cardholders, there is no annual fee, 0
percent APR on purchases and balance transfers for the first six
months and APR of prime rate plus 5.90 percent thereafter. The
cards also feature purchase protection, zero liability protection
for unauthorised purchases, emergency cash and card
replacement.
percent APR on purchases and balance transfers for the first six
months and APR of prime rate plus 5.90 percent thereafter. The
cards also feature purchase protection, zero liability protection
for unauthorised purchases, emergency cash and card
replacement.
Davis said groups now eligible for a Visa
Platinum credit card programme include local, regional and national
professional and fraternal groups, social clubs, local and regional
charities, charitable foundations, fundraising organisations,
private and other schools, research organisations, health and
wellness groups, sports teams, social clubs, and more.
Platinum credit card programme include local, regional and national
professional and fraternal groups, social clubs, local and regional
charities, charitable foundations, fundraising organisations,
private and other schools, research organisations, health and
wellness groups, sports teams, social clubs, and more.
Other early adopters of the UMB/CardPartner
programme include Reach Out and Read, the Pancreatic Cancer Action
Network, and the Oregon-California Trails Association, with more
coming online weekly.
programme include Reach Out and Read, the Pancreatic Cancer Action
Network, and the Oregon-California Trails Association, with more
coming online weekly.
“Interest has been strong,” Davis said. “We
think there are literally thousands of non-profit associations out
there who could benefit from an affinity card.”
think there are literally thousands of non-profit associations out
there who could benefit from an affinity card.”
