Co-branded Cards: Can It Go Beyond Branding

I had come across multiple news items regarding various co-branded cards like RBL Bank launching co-branded card with Zomato and HDFC Bank launching co-branded cards with Indigo Airlines. These stories prompted me into writing down my thoughts on this very popular product category among payment cards.

During my days in Banks I had worked on a co-branded card program in partnership with Jet Privilege. Apart from printing the Jet Privilege logo and customer’s JP number on the card the partnership also brought a common/shared reward program. From customer’s perspective customers could earn their credit card reward points in the form of JP miles and also get other promotional benefits that Jet Privilege was offering to its members. It has been years since and so far the fundamentals of co-branding remains the same.

In today’s day and age when mobile phone is increasingly becoming the preferred payment instrument instead of card plastic, specially with brands like Zomato and Indigo Airlines, I would have expected co-branded cards to offer benefits beyond shared promotions and rewards. Call me a demanding customer but if the common goal of co-branding exercise for both the brands is customer acquisition and retention, wouldn’t offering superior transaction experience across shared brand will enhance the offering even further. While banks are still in denial about UX being a key part of customer acquisition and retention strategy, brands like Zomato must know this very well.

One of the examples of how co-branding can go beyond shared rewards and also offer superior transaction experience between shared brands (specially for mobile phone universe) is single click transaction with partner brand. As part of co-branding exercise both entities exchange the customer identities at their respective ends, why not shared authentication.

When I implemented 3 D Secure, which is the back bone of online 2 factor authentication process for Visa (branded as VbV – Verified by Visa), MasterCard (branded as MasterCard Secure Code) and Diners cards, there was a model called Issuer Trusted Party of ITP, which allowed issuers to enable trusted third parties to perform 2nd factor of authentication during online transactions.

If I take Zomato and RBL Bank as sample case here, RBL can register Zomato as trusted third party and allow Zomato’s customer authentication as 2nd Factor Authentication by-passing Bank’s OTP during the transaction. This would mean that RBL Bank’s Zomato co-branded card holders will not only get the shared rewards and promotions, they will also have better transaction experience than any other card holders, thus making the case even stronger for customers to go for this card.

I am not sure how strong Zomato’s customer authentication mechanism is to be used at 2nd factor authentication for payment transaction but in this digital age they should have a strong authentication, if not they must work on it then.

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