New Report from Aite Group Reveals Potential Market for Decoupled Debit Cards

Boston, MA - 10 March 2008

A new report from Aite Group, LLC reveals that there is a sizeable potential market for decoupled debit cards in the United States, with about a third of cardholders expressing interest. Based on an online survey of 500 U.S. consumers, completed in January of 2008 and aimed at investigating trends in payments, rewards and loyalty, this report fleshes out key characteristics of the target market and provides recommendations to product managers at card issuers.

According to the report, decoupled debit cards - cards issued by an entity other than the institution where a customer's primary checking account resides - are a relatively new concept, but one with a large potential market. About one-third of online consumers who have either a debit or credit card are interested to very interested in decoupled debit card concepts.

Among its key findings, the report notes that consumers interested in decoupled debit cards are "reward addicts," going out of their way to earn rewards, participating in all types of rewards programs and frustrated by programs that are restrictive.

"Because co-brand cards usually restrict the scope of the rewards, as opposed to non-co-brand reward cards, our study suggests that the co-brand approach might not be the best path to marketing decoupled debit cards" says Gwenn Bézard, research director with Aite Group and co-author of the report. "Program managers may want to focus on issuing decoupled debit cards on their own, or as part of a coalition marketing alliance with a large number of merchants."

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