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Several Major Banks are Ending their Debit Card Rewards Program

March 28, 2011

ending debit card reward programs

Wells Fargo, Chase, and SunTrust recently announced that they are canceling their debit rewards program.  Debit rewards are awarded to customers for actions like spending, carrying high balances and making minimum deposits. Customers can then redeem the points they collect for cash or gift cards or even electronics.  Canceling these programs is the latest attempt by the banks to recoup their future lost revenues caused by the Federal Reserve’s proposed rule that would limit “swipe fees” — or the amount retailers pay the banks per debit card usage.

“So axing debit rewards programs is just one more way banks are hoping to recoup revenue they expect to lose.  Or, they may be hoping to get consumers so riled up that the Fed thinks twice about imposing the new rules,” said Curtis Arnold, founder of CardRatings.com.

The financial impact of this change and how consumers, retailers and banks will interact differently will remain to be seen.  One thing is certain, financial institutions will continue to be challenged by the impact of federal regulations on their industry.

One approach financial institutions can take to recoup lost revenues caused by federal regulations, is to implement retail branch business intelligence, which will  improve operational efficiencies.  For example, FMSI’s The Teller Management System™ provides bank management with decision-support intelligence.  By scheduling tellers and distributing sophisticated staffing reports based on forecasted transaction volumes, The Teller Management System™ helps banks gain better control of labor costs while increasing service levels.  Staff the right number of tellers, at the right place, at the right time.

Excerpts from this blog post were taken from the cnnmoney.com article “Wells Fargo, Chase, SunTrust cancel debit rewards program

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