- Verizon on Friday is launching a consumer credit card that will offer 4% back on fuel and grocery purchases including delivery, 3% back on dining including delivery and takeout, 2% on Verizon purchases and 1% back on everything else, the company announced in a press release this week.
- Eligibility and currency are two notable restrictions on the product. The card will be available only to existing Verizon wireless customers, and the rewards are paid out in Verizon Dollars, which are redeemable only for Verizon purchases such as a monthly wireless bill or a new phone. However, customers can accumulate unlimited Verizon Dollars that never expire.
- Verizon isn't the only telecom giant planning an entry into payments this year. Samsung is partnering with personal finance startup SoFi to launch a debit card and cash management account this summer, a company executive announced in a May blog post.
At least two of the card's features show the mobile-phone giant is paying attention to consumer trends influenced by the coronavirus. First, the richest reward accompanies a category — groceries — that has suffered far less of a spending drought during the pandemic than others, such as clothing or dining out. Second, the card is contactless, which may ease concerns of consumers looking to avoid virus spread through in-store, person-to-person contact.
Verizon is partnering with issuer Synchrony on the card, which will use Visa's payment network. Planning on the card has been in the works for months — long before the coronavirus took hold, Frank Boulben, a senior vice president at Verizon, said Monday in a live-streamed announcement. Responses from a May customer survey persuaded executives to launch amid the pandemic, he said.
Verizon follows American Express and JPMorgan Chase in offering bolstered grocery rewards in response to consumer trends. Synchrony President Brian Doubles said during the company's first-quarter earnings call in April that the pandemic would spur consumers to use cards differently.
"We know that they're going to shop differently, they're going to spend differently, they're going to pay differently," Doubles said, according to American Banker. "We know our partners are going to come out of this looking differently, and they'll have different strategies that we need to flex to."
New cardholders can get up to $100 in wireless bill credits over 24 consecutive months when they use their card to pay their monthly Verizon bill. They can also get a $5 or $10 a month per-line discount when they sign up for auto-pay and paper-free billing. Cardholders can have a maximum of 10 phone lines.
The card would have limited use for consumers that switch carriers, though. Users that cancel their Verizon plan will no longer earn rewards and discounts, but they can still use the card to make purchases, Verizon said.