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Discover is adding new features to its Discover Cashback Debit product, which was previously known as Discover Cashback Checking. This follows an expansion of the product in February, in which the firm added 1% cash back on up to $3,000 of debit card purchases in a given month on eligible purchases.
The new features could bolster the card’s value proposition since they are in high demand:
Freeze It: This feature allows cardholders to temporarily freeze their cards from being used for purchases and ATM transactions. This could be a big draw for new customers given that rising fraud, particularly at ATMs, has amplified consumer concern about their payment information. Further, consumers want a feature specifically like Freeze It — 48% of respondents to a recent Fiserv study said they wanted their bank to offer the ability to temporarily deactivate their cards in the case of loss or theft — which could lead to high card signups.
Cash back redemption to savings: Cardholders will be able to transfer their cash back into a Discover Savings account each month. Before, the funds were redeemed either via a credit to a cardholder’s account or through a transfer to their Discover credit card if the customer had one. Debit rewards programs are rare, and the ones that do exist are limited. But customers love rewards, so the ability to earn cash back on debit cards, which are a top payment option, combined with simplified redemption opportunities could make the feature even more valuable.
New design: The card also boasts a new design, which can help Discover appeal to a new demographic. Millennials in particular care about the appearance of their debit card — JPMorgan Chase’s premium Sapphire Reserve card popularized in part because of its appearance. And other firms, including Acorns, Venmo, and Square Cash, have been stepping up design options as a way to attract these users.
The combination of three popular features can allow Discover to expand its reach.Investing in adding benefits and a new design to its card can be pricey. But if implemented well, it could allow Discover to differentiate itself from other debit providers and, in turn, expand its user base into new demographics or grow engagement.
That can fuel growth of existing segments while also offering opportunities to upsell users to more lucrative credit or loan products, which, in turn, could supplement existing volume growth across the board and accelerate performance.
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Source:: Business Insider – Finance