A co-branded credit card is a credit card issued by a particular bank in partnership with a retailer. Usually, these cards will have the logos of both these brands. These cards will provide the user with attractive discounts or rewards when making spends on sponsoring brands. For example, a Jet Privilege card provided by HDFC bank will have rewards and discounts on Jet Airways spends.
Co-branded cards benefit a retailer and the bank can structure the co-branded card in a variety of ways. In order to provide this type of credit card, a retailer must partner with a bank or financial institution. When it comes to co-branded cards, the retailer’s acquiring bank usually partners with the retailer. This simplifies the transaction procedure as the partnership relies primarily on the acquiring bank’s network processor.
However, there are instances where retailers choose to work with a credit provider that is not partaking in their business. American Express and Discover are two cards that any retailer can partner with as they are both the card issuer and the network processor.
Benefits of Co-Branded Credit Cards
- A retailer can choose to establish a co-branding relationship with any bank.
- This has the potential to increase a customer’s business as there will be discounts linked to these deals.
- The banks themselves with have a surge in their business.
- A customer enjoys various benefits from the retailer.
Co-branded cards are beneficial to the retailer, bank, and the customer. Although the customer has to pay a premium generally to obtain this type of card, he/she will benefit from the discounts provided by the merchant.
Flipkart and Axis Bank launch co-branded credit card with unlimited cashback
E-commerce giant Flipkart and Axis Bank have launched a co-branded credit card which offers unlimited cashback on your transactions.
With a fee of Rs.500, this card gives you 5% unlimited cashback on Flipkart, 2GUD, and Myntra transactions. All other transactions earn you an unlimited cashback of 1.5%.and a four free visits to airport lounges in India each year.