Evaluating the Vendors of Merchant Funded Incentives

Report Summary

Evaluating the Vendors of Merchant Funded Incentives

As the merchant funded incentives market gains traction, a handful of vendors vie for clients and market share.

Boston, April 25, 2012 – A new report from Aite Group evaluates the vendors of merchant funded incentives (MFI) solutions that are available to financial institutions, issuers, card processors, and merchants. Based on October 2011 to April 2012 Aite Group interviews with MFI vendors and their bank and merchant clients, the report profiles five vendors and provides a checklist that potential clients can use in the selection process.

Merchant funded incentives programs have been gaining popularity in the market, particularly since late 2011, when the Durbin amendment curtailed debit card rewards programs. More than 7,400 U.S. financial institutions of all sizes currently provide MFI programs through vendors, and that number is growing. When selecting an MFI vendor, financial institutions should work with a clear understanding of what makes a provider successful. Vendors will have their work cut out for them; they must differentiate themselves from the competition and grow their merchant networks to support these programs.

“The dynamic and emerging MFI marketplace represents upside revenue potential and relatively low-risk, minimal-cost opportunities for FIs and processors,” says Madeline K. Aufseeser, senior analyst with Aite Group and author of this report. “For the FIs and processors, the key to maximizing program potential will be to leverage best practices to create true cardholder adoption and utility, and to work with a vendor that can facilitate that.”

The report profiles five vendors of merchant funded incentives: Affinity Solutions, Cartera Commerce, edo, FreeMonee Network Inc., and Truaxis.

This 37-page Impact Report contains eight figures and 13 tables. It is available for download to clients of Aite Group’s Retail Banking service.

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