MasterCard Focuses On Affluent Customers, Prepaid Cards Key to Growth
It pays to be rich sometimes. That happens to be MasterCard`s new marketing strategy. In an effort to strengthen their brand, the credit card issuer has begun highlighting products that target their more affluent consumer base.
MasterCard`s World Elite program is a rewards program offered to the credit card issuers` larger net worth customers. Also, this summer, the company plans to put a big marketing push behind its “Priceless Cities” program.
The program allows New York MasterCard customers to gain entry into special events with their credit or debit cards. New York is the first market for the Priceless Cities program; other cities will follow after the New York pilot has been deemed successful.
“It’s a wide-ranging campaign that goes from television advertising to print to outdoor to make sure that consumers that live in New York and want to enjoy what is available here can really get access to it,” chief marketing officer at MasterCard, Alfredo Gangotena said.
The goal of their new campaign strategy is to attract consumers to electronic payment methods as opposed to traditional cash and checks, according to President and Chief Executive Ajay Banga, who told analysts on a conference call for investors.
85% of all worldwide retail transactions are purchased with a check or cash at the moment. This percentage leaves MasterCard with a wide opportunity to expand its customer base, internationally. MasterCard makes a profit by processing the transactions made with credit and debit cards that have been branded with their insignia. The cards are then issued to the population via bank partnerships.
On the other end of the spectrum, MasterCard will also begin marketing its prepaid cards. Prepaid cards are usually directed towards low-income consumers or consumers who don`t have bank accounts. These consumers could be new to the credit card world, or may have suffered a financial setback in the form of bankruptcy or credit card default.
MasterCard partnered with Wal-Mart earlier this year to begin selling a MasterCard version of the Wal-Mart MoneyCard. The discount retailer already sells a Visa-branded MoneyCard. In April, MasterCard bought Travelex Holdings Ltd. for $481 million. Travelex specializes in the management of prepaid program operations. The new company under MasterCard will be called Access Prepaid Worldwide, and will focus on marketing prepaid services for its global travelers.