Amazon expands co-brand program beyond retail rewards

Article by Grace Broadbent | May 2, 2023

The news: Amazon and Chase rolled out new travel-based features for the Amazon Visa Card portfolio, which includes both the Prime Visa and Amazon Visa cards, per a press release.

Prime Visa and Amazon Visa cardholders will now earn 5% back and 3% back, respectively, on purchases made through Chase Travel, Chase’s new booking platform.
Both cards offer 2% back on local transit, including rideshares.
They also feature daily rewards—an extremely valuable feature for 27% of respondents to our 2022 US Cash- Back Credit Card Benchmark survey—which lets cardholders view and redeem rewards on a daily basis rather than monthly.

Prime Visa and Amazon Visa already offered 5% back and 3% back on Amazon purchases, respectively.

Why this could work: Travel-based rewards can help attract and retain cardholders to the Amazon Visa card portfolio. They can also encourage broader card use than just Amazon purchases.

The travel industry is booming as consumers release pent-up demand post-pandemic and take advantage of remote work’s increased flexibility. Amazon hopes to benefit from this traction and prevent the spend from going on travel-focused credit cards.
Travel spending was 4% above pre-pandemic levels in January, according to the US Travel Association. And more than half of US consumers intend to travel within the next six months.
The average cost of a one-week vacation in the US for one person is $1,578, per Bankrate. And total US digital travel sales will total $261.37 billion in 2023, according to our forecast, opening up a large volume stream for Amazon.

The bigger picture: The co-brand space is in flux.

New programs have come online, including cards from Chase and DoorDash and Citi and Overstock.
Other co-brand cards are changing hands: Wells Fargo took over the Choice Hotels card, and Walmart’s sued to terminate its partnership with Capital One.

Moving the Amazon Visa portfolio beyond a traditional retail card by adding travel-based features can help the co-brands stand out in the field and make them more of a primary card for customers. It also lets the cards compete in the general travel card landscape, boosting their growth opportunities.