Private Label Credit Cards: Retailer-Specific Mobile App Use on the Rise

Retailers and their private label credit card partners continue to refine their retailer-specific mobile apps, which provide a very important customer loyalty and engagement nexus that increasingly includes payment and loan options.

Packaged Facts in the report Private Label Credit Cards in the U.S., 11th Edition finds that retailer-specific mobile apps have been downloaded by 44% of credit card users, 82% of whom have used them in the past 30 days. And among credit card holders who use retailer-specific mobile apps, breath of use is robust. Among 15 possible usage methods (from getting retailer offers/discounts to store browsing to earning points and rewards) the average credit card holders had used almost nine.

Of note, 58% said they had used a retailer-specific app to pay for a purchase at the retailer, while 32% they had used one to get instant special financing from the retailer. Among those financing options are short-term installment loans, which are finding their way into more and more retailer-specific apps. 

In partnership with Synchrony Financial, online retailer Zulily offers a card that provides a seamless and convenient option for the online retailer’s fans to shop its more than 100 daily sales events. But what’s most unique about the card is its Smart-pay option, an installment option that lets users spread payments across three separate charges. Each amount is added to the card-holder’s balance every 30 days.

Compared with some other retailers, Forever 21 pushes the convenience of its credit card almost as much as its financial rewards. Like Zulily, Forever 21 also seeks to curry favor among the budget-conscious by offering Afterpay, an installment payment option. However, unlike Zulily, Forever 21 offers this option to consumers no matter how they pay—and not in connection with the private label card (Forever 21 partners with Alliance Data Systems for its card program and with Afterpay Touch Group for these loans).

These installment loan products not only provide financing options that customers may find more manageable than carrying an open-ended balance on a credit card but also can be used conveniently and instantaneously in the app as part of the checkout process, a potent mix that surely helps drive loan growth and retailer sales.

-- by David Morris, senior market research consultant