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Is Funding Really a Barrier to Co-Brand Debit?

(New York, NY) Co-brand debit cards continue to gain attention across the payments industry, but questions remain about whether they can achieve notable adoption in a market long dominated by credit. One commonly cited challenge is funding—unlike credit cards, co-brand debit programs require cardholders to actively move or maintain money in an associated account. Auriemma Group’s latest issue of The Payments Report examines how cardholders are funding co-brand debit cards today and finds that concerns about this potential barrier may be overstated.

Auriemma’s data indicates co-brand debit cardholders tend to have an easy time managing their account. From opening (75% easy), funding (75%), and linking to other bank accounts (70%), co-brand debit accounts appear to deliver a low-friction experience. For issuers and brands, this suggests that usability may be less of a challenge than driving initial interest and engagement.

“Cardholders most often link a direct deposit to their co-brand debit account, but transfer-based funding is utilized too,” says Jonathan O’Connor, Senior Manager of Research at Auriemma Group. “And most of those who do not currently hold a co-brand card say they would likely fund it the same way if they acquired one.”

Not only are co-brand debit cardholders funding their accounts, Auriemma’s research found that 43% would maintain a balance of at least $1,000 if their card offered 1% cash back on partner brand purchases, gas, and groceries, and 0.5% cash back on everything else. Additionally, nearly three-quarters would fund that account at least monthly, highlighting that the product could become a competitor to traditional debit.

“Funding co-brand debit accounts may be less of a barrier than expected,” says O’Connor. “Cardholders are not only open to a variety of funding methods, but many indicate a willingness to fund them regularly and keep substantial balances in these accounts. That suggests the bigger challenge for issuers and brands may not be getting money into the account—it may be creating a sustainable rewards proposition strong enough to motivate cardholders to make the account part of their everyday financial lives.”

Drawing on insights from recent issues of The Payments Report, Auriemma Group will be exploring these findings and more in a member-exclusive webinar Rethinking Co‑Brand Cards: Debit’s Emerging Role on June 24 from 2:00–2:45pm EST. The session will examine where co-brand debit fits within today’s payments landscape, why it is gaining momentum, and the key considerations for issuers and brand partners as they evaluate future program strategies.

Members interested in joining should email research@auriemma.group for more information.

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in April 2026 among 800 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

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Are Co-Brand Debit Cards Ready for a Second Look?

(New York, NY) Co-brand card programs have long centered around credit, but debit-based offerings are beginning to emerge. Co-brand debit cards represent an opportunity for brands and issuers to maintain engagement when credit approval is not possible, according to Auriemma Group’s latest issue of The Payments Report.

If declined for a co-branded credit card with a 5/2/1 rewards structure, 53% of debit cardholders say they are likely to accept a second-look co-brand debit card offering 1% cash back and $100 sign-up bonus after spending $500 in the first 90 days. In fact, nearly two-thirds of debit cardholders view co-brand debit as a steppingstone to a brand’s credit card and say a positive experience with it would make them more likely to apply for one.

“Brands and issuers have an opportunity to turn a declined credit application into a constructive experience,” says Jonathan O’Connor, Senior Manager of Research at Auriemma Group. “A well-structured debit alternative—backed by a recognized issuer and anchored in upfront incentives—can keep a would-be cardholder in the brand’s ecosystem rather than losing them at the point of rejection.”

Co-brand debit gives brands a path to re-engage customers who might otherwise be lost after a credit denial—meeting them where they already are. Debit cardholders gravitate toward the product for practical reasons: they want to spend money they already have, avoid accumulating interest, and maintain tighter control over their finances. A co-brand debit offer respects those preferences while keeping the customer in the brand’s orbit.

“Co-brand debit cards aren’t a consolation prize—they are a strategic entry point,” says O’Connor. “While the product can find success as a second-look offering, we believe it also has the potential to stand on its own and will continue exploring that in upcoming research.”

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in October 2025 among 800 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

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Are Stored Value Accounts a Replacement or Complement to Traditional Banking?

(New York, NY) The rapid evolution of FinTech solutions continues to reshape consumer perceptions of banking, with stored value accounts (SVAs) emerging as a potential competitor to traditional banking accounts and cards. Auriemma Group’s latest issue of The Payments Reports uncovers positive sentiments around SVAs, underscoring their role in the financial ecosystem and raising questions about their long-term viability as a banking alternative.

SVAs offered by providers like PayPal and Venmo allow consumers to preload or receive funds and use them for a variety of transactions. Auriemma’s research shows that 61% of debit cardholders view SVAs as at least complementary to traditional banking, while 31% believe these accounts could replace at least some banking functions. Notably, 8% feel SVAs could entirely replace traditional banking services.

“Stored value accounts represent an important evolution in financial tools, but the collapse of Synapse underscores the risks of fintech intermediaries not covered by the FDIC,” says Jonathan O’Connor, Senior Manager of Research at Auriemma Group. “While stored value accounts offer benefits like lower fees and faster transactions, traditional banks deliver stability, security, and trust—advantages that consumers continue to value.”

What Can Traditional Banks Do?

SVAs are causing a modest stir among cardholders. Less than three-in-ten say they would be likely to use the option if offered by a FinTech provider. However, as SVAs grow in popularity, traditional banks can differentiate themselves by doubling down on their strengths and addressing evolving consumer needs. Auriemma’s research highlights several strategies banks can use to endear themselves to current and potential customers:

  1. Building Trust: Traditional banks should emphasize their strong track record of security—including FDIC backing—and fraud prevention. Providing clear, transparent policies and educating customers about safeguards can build trust that SVAs may not yet fully inspire.
  2. Enhanced Digital Experiences: Streamlining mobile and online banking interfaces can help banks compete with the tech-first approach of FinTechs. User-friendly apps with integrated budgeting tools, instant payments, and easy account management could make a significant difference.
  3. Personalized Financial Products: Banks can leverage their broad customer data to offer tailored financial products, such as personalized savings plans or rewards programs that align with individual spending habits.
  4. Bundled Offerings: By packaging SVAs with more traditional banking services—like high-yield savings accounts, credit cards, and loans—banks can create holistic financial solutions that FinTechs may struggle to match.

Opportunities for Growth

Most of those who have used a SVA with a FinTech provider say they would likely use more of that provider’s products, if available. This highlights the possibility of expansion SVAs create for those who use them. While largely benefiting FinTechs hoping to expand into other financial services, SVAs could also be a gateway for traditional banks hoping to deepen their relationship with new and existing customers.

“Traditional banks have the advantage of deep customer relationships, established financial stability, and the trust that comes with rigorous regulatory oversight. By leaning into these strengths and innovating alongside FinTechs, banks can remain central to their customers’ financial lives,” says O’Connor. “Our research shows that the future of banking will likely blend the reliability of traditional institutions with the agility and accessibility of modern FinTech solutions, creating a dynamic ecosystem that meets a diverse set of consumer needs.”

Survey Methodology

The Payments Report

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in October 2024 among 804 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.

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Transitioning Physical Payment Card to Digital-Only Could Have Detrimental Impact [Abstract]

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