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[alexs (Alex Sherwood)]

Tom shared his thoughts on the evolution of air miles & cashback rewards in yesterday’s interview. It sounds like there might have a solution in mind

@alexs

A big area for me is retail loyalty and cashback. You had these Amex air miles and cash back cards, basically founded on high interchange. So, with a credit card, the merchant would pay 2%+ to accept credit card payments and what the credit card company would do is basically take that 2%, give 1% back to you as a customer as a “bribe” to come and use their card and keep 1% by virtue of them being an oligopoly. And the European Union came in and said “that sounds like a competition issue, how about we just cap your pricing at 0.3%.” What that meant is that these credit card companies can no longer afford to give the same level of cash back – you can’t give 1% if you only earn 0.3% and so air miles have been gutted, Avios has been gutted, all the cash back schemes have been totally gutted. But people are still asking for points. And so, for me, that area is ripe.