Reward programs have become a significant factor influencing consumer behavior, with many individuals opting for specific payment methods that allow them to earn points or rewards for online purchases and bill payments.
In the ‘New Payment Options: The Lure of Payment Method Rewards’ report, PYMNTS uses a survey of over 2,000 Americans to examine consumers’ willingness to use online bank transfers for recurring bill payments and online purchases and the features that would encourage them to use online bank transfers.
According to data published in the joint PYMNTS-Nuvei study, credit cards continue to dominate as the preferred payment method for earning reward points, with 69% of consumers opting for these cards when making online purchases to accumulate rewards, and 68% choosing them for recurring bill payments.
This preference extends across generations, as 84% of baby boomers and seniors also prefer credit cards for online purchases, with 75% using them for recurring bill payments.
Debit card users, on the other hand, are not a popular choice among consumers looking to earn reward points.
In fact, about 38% of consumers surveyed said they do not use debit cards for recurring bill payments because they’re unable to earn points or rewards, while 35% did the same for online purchases. Credit card users, however, experience a lower percentage of these problems, with only 20% choosing not to do so for similar reasons.
Additionally, the data suggests that while consumers have come to expect the opportunity to earn rewards when using credit cards, this expectation is not as prevalent among users of alternative payment methods.
For instance, just 15% of consumers who prefer paying through bank transfers for online purchases report an issue with the lack of reward points. Similarly, only 13% of those using bank transfers for recurring bill payments express concerns about the absence of rewards. These findings indicate that many online bank transfer users do not currently anticipate earning rewards for these types of transactions.
Overall, reward points play a significant role in shaping consumer payment preferences. As noted in the study, 32% of consumers cite the ability to earn rewards points as a crucial factor when selecting their preferred payment method, and 13% consider rewards as the most important reason for their choice.