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How effective are rewards programs in promoting payment card usage? Empirical evidence

Carbó-Valverde, Santiago and Liñares-Zegarra, José (2011) 'How effective are rewards programs in promoting payment card usage? Empirical evidence.' Journal of Banking & Finance, 35 (12). 3275 - 3291. ISSN 0378-4266

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Abstract

Card issuers have mainly relied on rewards programs as their main strategy to increase usage. However, there is scarce evidence on the effectiveness of these programs. This paper is addressing two topics which could have important managerial and public policy implications: (i) it estimates the impact of rewards on the use of cards and (ii) it quantifies their economic effects in terms of the cash substitution. We find that rewards may significantly modify choice for card payments. Their economic impact also varies significantly across types of rewards and merchant activities. Additionally, rewards seem to be more effective for debit cards.

Item Type: Article
Uncontrolled Keywords: Payment cards, Rewards, Choice, Merchants, Cardholders
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Jose Linares Zegarra
Date Deposited: 08 Sep 2016 13:26
Last Modified: 26 Mar 2019 14:15
URI: http://repository.essex.ac.uk/id/eprint/17483

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