Community Engagement Card Programs

As financial institutions (FIs) seek innovative ways to strengthen and differentiate their card portfolios, community and affinity cards present a compelling strategy to boost transaction volume, increase competitiveness, and deepen ties with local communities. Community and affinity cards function like typical credit or debit cards but are designed to support local initiatives, channeling benefits to community programs and non-profits with every transaction. With this approach, FIs not only increase card usage, but also foster brand loyalty and positive community impact.

Community Card Overview

TransFund provides FIs with the means to issue custom community and affinity cards tailored to organizations and communities of any size. These cards come in various forms, and are designed to serve different localities, organizations, and non-profits. Community cards allow FIs to partner with a wide range of organizations and/or communities, while affinity cards are tailored to support specific non-profits or educational institutions. Partnerships with these organizations enable FIs to differentiate their card portfolios, engage existing cardholders, and acquire new members. FIs automatically donate a portion of their interchange income for each transaction made with the card or contribute a fixed contribution.¹

TransFund enables FIs to launch affinity-branded, school, and/or custom community cards, increasing FI competitiveness by appealing to a wider audience, giving passionate cardholders a voice, and enabling support of local communities and organizations. These cards feature the FI’s name and logo, along with the name and logo of the partnered high school, church, hospital, fire department, etc. TransFund’s comprehensive educational materials empower institutions to make well-informed decisions when selecting and managing community and affinity partnerships. Additionally, TransFund’s turnkey marketing solutions enable FIs to drive cardholder acquisition and engagement through targeted promotions.

Benefits of Community Engagement Cards

Key community and affinity card benefits include:

• Increased transaction volume: Affinity and community cards boost transaction volume by encouraging top-of-wallet use; cardholders are motivated to use their co-branded affinity or community cards more frequently, knowing that a portion of every purchase supports an organization they care about. TransFund found that within its card portfolio, cardholders with affinity-branded and community cards make an average of five more transactions per month compared to regular debit card users.² Additionally, with one FI offering school card programs, TransFund found school cards were used for 8 more monthly transactions than the average card in the FI’s portfolio.²
• Increased spend: Beyond driving higher transaction volume, cardholders tend to consolidate their everyday spend on their affinity and community cards to maximize their impact and to enjoy various rewards and perks. For example, according to a recent Mastercard study, cardholders spend 2.2x more than the market average on cards linked to causes that they are passionate about.³
• Increased financial support: In addition to driving transaction volume and overall spend, partner organizations – such as communities and non-profits – benefit from a consistent stream of financial support through lump-sum donations, or through donations tied to interchange.

While community and affinity card benefits are robust, partnership considerations and overall strategic alignment are crucial to the long-term success and impact of these card programs.

Partnership Considerations

When building community and affinity card programs, FIs should consider partnership goals and potential synergies, as well as understand who their potential partners serve. This will help ensure strategic alignment and long-term impact – two critical success factors when issuing community and affinity cards:

• Partnership goals: FIs and their partner organizations should align their overarching goals, timelines, and overall purpose of their collaboration to prevent potential long-term misalignment. Both parties should agree on clear and measurable definitions of success, such as program scale, financial performance, or community contributions. Establishing these metrics upfront provides a solid foundation for tracking progress and achieving meaningful, mutually beneficial outcomes.⁴

• Partner synergies: It is important to confirm that the partner organization’s audience is interested in the card product. FIs should pursue partnerships with organizations that represent their cardholders, share their core values and inspire genuine enthusiasm, ensuring the collaboration feels like a natural fit for their cardholder base.

• Partner demographics: When developing community or affinity card programs, FIs should consider the demographics of potential partners. Factors such as geographic footprint – which is especially important for community institutions – and the size of the partner’s membership base are key considerations. FIs should also discuss member engagement levels with prospective partners to ensure the partnership will drive meaningful participation.⁴

Conclusion

Community and affinity card programs empower FIs to differentiate their card portfolios while making a meaningful impact on local communities and non-profits. By building relationships with the right partners and thoughtfully designing these programs, FIs can drive higher transaction volumes, increase cardholder spending, and boost competitiveness. At the same time, partner organizations benefit from financial support, helping them further their missions while cardholders enjoy the satisfaction of supporting their favorite causes with every purchase. With TransFund’s robust community engagement and affinity card program offerings, FIs can strengthen their competitive edge and positively impact the communities they serve.

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Sources:

1. Investopedia, Affinity Card: Meaning, Benefits, Example, 2021
2. TransFund Expertise
3. Mastercard, Passion Cards: External Use Cases, 2023
4. Advisors Plus, Affinity Card Program, 2019