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What is Co branded Credit Card?


Co-Branded Cards: A co-branded card is a retail merchant credit card, this type of card is offered in partnership with a particular network processor. Co-branded cards are branded with the logo of the retailer and network processor. This is a card that is offered by two organizations, typically the first one is a lending institution such as a department store and the other one is a bank or card network such as MasterCard, Visa, American Express, Discover or a non-financial group. Hotels, retail chains and airlines are very known for offering co-branded cards. The most popular advantages of co-branded cards are just like discounts or rewards points and special offers. Some non-financial groups that offer such cards also that gives offer loyalty points on purchases made by way of the card. 

BREAKING DOWN Co-Branded Card :

In the retailer’s business, such things are important just like  Co-branded card relationships, it is an important part of a retailer’s business. They allow the retailer to issue both open loop credit cards and single-purpose cards to customers. There are many varieties of ways where Co-branded card relationships can be structured.

Co-Branded Card Relationships and Card Processing :

In order to provide a co-branded credit card,  a merchandiser must be the partner with a financial institution. Generally, the financial institution is the merchandiser ’s acquiring bank. This can make easier to understand the co-branded card transaction process and the relationship will be unable to manage without the acquiring bank’s network processor. In different other cases, the merchandiser may choose to work by way of a third-party credit card supplier. In all state of affairs, the network processor is the primary logo displayed on the co-branded credit card along with the merchandise. Discover and American Express are two companies that issue unique and special co-branded card relationships since they have the capacity serving as both the credit providing the network processor and financial institution. Other co-branded card promoters include MasterCard and visa. 

In all transactions, the merchant acquiring bank works with the merchandiser or retailer processing any electronic payment card purchases. If the bank is being acquired through co-branded card relationship, the transaction process can be made easier to understand, specifically in the case of branded purchases where merchandiser and the bank are the quiet only the two organization involved. If the merchant works with third-party providing credit cards, the third-party card provider and the co-branded processor will be involved. 

Co-Branded Card Benefits :

Merchandiser can work with all type of provider they choose to organize a co-branded card relationship. Retail credit card issuance permits a merchant offering customers numberless benefits. Retailers continually market concessions for customers using their co-branded credit card. They also permit customers accumulating points that can be used as concessions in the vicinity of future purchases.

When a customer applies for a merchant credit card they can be authorized for either an only one purpose card, such as an open loop card, or a store-particular card. An only one purpose card permits the customer to one and only use the card with the merchant. These cards are issued with a credit fixed time and recommend offering customers the same standard honour. They are not generally visibly co-branded; although, they may quiet follow co-branded transaction procedures.

If a customer is a permission granted for an open loop card, such as the one Southwest Airlines permits via Chase, The card could have been used anywhere that it is accepted by he or her. Open loop cards are usually the almost all visible co-branded cards since they involve the network processor’s logo. They necessitate external merchants using the co-branded processor & contact the card-providing department store for approval. The card-providing institution also controls the rewards accumulated by the customer with the retail merchant.

What is a general purpose credit card?

These cards are syndicated with the cardholder’s or consumer’s revolving credit account at a financial institution or other business.  The revolving credit belt is capped or fixed time based on the creditworthiness of the consumer.  These cards can be used anywhere and every location that accepts credit cards from the specific bankcard organization and involves closed-loop cards and bank cards. Bankcards require transaction processing arrangements together with participants and agreements, at the same time as closed-loop cards may not.

Department store provides bankcards in co-occurrence with the 3 great credit card association networks, American Express, Visa and MasterCard. American Express, Visa and MasterCard manage “open” networks in which department store can compete in card-providing and merchant obtaining.  The merchant acquirer and the card-providing financial institution can be different organizations. Firms that serve as both the card providing representative and the merchant obtainer provide closed-loop credit cards.

5 advantages of co-branded cards

Co-branded credit cards are the product of a mutual partnership between a specific merchant & a credit card provider. Cooperatively, a credit card does make by them that bears the merchant’s logo and issue merchant-particular advantage to brand-loyal consumers. As an end result, you achieve discounts and rewards from the brands you are most trustworthy too.

Once you grasp knowledge how are they work, they are beneficial and cost-effective. However, the beneficial rewards provided by a co-branded credit card are tailored particularly to the services provided by the associated merchant.

Advantages of Co-Branded Credit Cards :

Accepted worldwide :

Co-branded cards are worldwide cards. They are accepted globally & can be used at any retail store across the world while the bill is produced in Indian rupee. Their global acceptability is due to the relationship they have with Mastercard or VISA.

Rewards Customer Loyalty :

It is one and only a way for the card provider as well as the associate merchant to beneficial reward their trustworthy customers. The cards while being a beneficial point will further magnify the frequency of engagement, therefore creating a win for all.

Freebies for the customers :

Customers have got offered free merchandise by them for spends tremendous particular amounts or redemption freedom of choice along with a common buyer program or a common flyer program.

Customized to lifestyle requirements :

Since co-branded credit cards are joined to a specific brand, customers can utility cards customized to their lifestyle requirements & spend category.

Fee waivers :

Nearly all co-branded credit cards do not have transaction fees & also give surcharge waivers for customers.