JPMorgan’s DoorDash card deal can build momentum for co-brand card business

The news: JPMorgan Chase and on-demand food delivery provider DoorDash will launch a co-brand credit card on Mastercard’s network, per a press release. While neither company disclosed perks for the DoorDash Rewards Mastercard, the card will feature Mastercard World Elite benefits like identity theft and fraud protections.

Why it’s worth watching: Food delivery’s popularity will set a strong foundation for the DoorDash co-brand card.

• DoorDash’s US restaurant sales are expected to grow 17% year over year in 2022 and reach $37.34 billion, according to Insider Intelligence forecasts. While that’s slower than last year (+60.4% YoY), we expect the firm’s growth will accelerate next year (+18.5% YoY).
• Consumers still value the convenience of food delivery even as inflation squeezes spending. Thirty-one percent of US respondents cited food delivery as the leading omnichannel activity they participate in, per a 2022 McKinsey report.

Food delivery’s endurance might make loyal customers more inclined to try out products like the DoorDash card, which can give them better rewards.

JPMorgan’s opportunity: The dining-focused co-brand card can bolster Chase card spending and build out its co-brand portfolio—which Co-CEO of consumer and community banking Marianne Lake called a long-term growth driver.

JPMorgan recently launched the Instacart co-brand, and working with DoorDash will reinforce its push into the food sector. The new card will likely deliver on the types of perks consumers seek and value: 38% of US consumers said restaurants provide the most value for earning cash-back credit card rewards, per Insider Intelligence’s US Cash-Back Credit Card Emerging Features Benchmark 2022. It will also reinforce the shift to digital co-brands, which are set to become more popular as brands adapt their offerings to appeal to digital-native consumers. Digital co-brands also align with ecommerce growth.

DoorDash’s benefit: The card will help the company increase customer loyalty and sales volume through brand-specific perks and other shopping rewards. This will help keep DoorDash top-of-mind for customers so it can stay ahead of rivals like Uber Eats and GrubHub, which don’t offer credit cards.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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