The new agreement, announced Monday (July 21), “secures Mastercard as the exclusive payment network partner for American’s co-branded credit cards” after almost 40 years of collaboration, the companies said in a news release.
That also means the ongoing enhancement of the AAdvantage program — American’s travel rewards program — while also offering cardholders with “seamless and personalized” experiences on each trip, the release added.
“We’re incredibly proud of our partnership with American Airlines and the nearly 40 years of priceless experiences, benefits and innovation the program has brought to cardholders,” said Michael Miebach, CEO at Mastercard. “Looking to the future, we’ll continue to bring our expanded suite of products and services to deliver what cardmembers want: personalized offers, valuable rewards, fraud protection and opportunities to explore their passions.”
According to the release, American will use Mastercard’s payments infrastructure and analytics to enhance the AAdvantage program, offering more personalized offers, “optimized rewards” and seamless, secure transactions.
Research by PYMNTS Intelligence, from the “How People Pay” eBook, found that 40% of consumers most recently used a credit card to pay for travel services.
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“This indicates a strategic choice for larger expenditures, where credit cards often offer benefits such as rewards or better expense management,” PYMNTS wrote earlier this month.
More recently, PYMNTS looked at the ways the expansion of co-branded credit card options to the non-prime consumer segment offers a pathway to credit inclusion.
These programs help increase consumer engagement while giving consumers the potential to “graduate” to more robust credit access as their financial health gets better, Concora Credit Chief Commercial Officer Rolando De Gracia said in an interview PYMNTS, adding that co-branded credit cards remain the leading engagement methodology for most brands.
“That person has daily engagement with your brand,” De Garcia said. “When they pull that card to get coffee, or they pull their card to buy something else, they’re tapping with your brand. Once someone has that kind of dedicated line of credit or they have that additional reward in their payment methodology with you, the frequency of visits increases.”
This gives consumers a rationale to go back to a specific store, book another trip with an airline or extend their hotel stays. In the end, this makes the brand “top of mind” when making booking decisions, potentially swaying a consumer toward a particular offering simply because of the points they’ve accumulated, he told PYMNTS.
