Pathmark Sidestepping Interchange Fees With Loyalty/Payment Combo Card

The Pathmark 141-store regional grocery chain is going to trial with an innovative way to slash credit card interchange fees.

Pathmark is rolling out a branded combination loyalty and payment card, selling convenience and discounts to its customers. The catch: the combo card only offers debit payment.

The chain will start a trial of the Pathmark Advantage Payment Card in December at between five and 10 New York Pathmark stores, where the trial will be evaluated for six months, said Pathmark spokesperson Rich Savner.

The convenience part of their pitch is for customers to have one piece of plastic to handle both payment and loyalty/CRM. Savner positioned the move as being faster and more convenient for customers than writing checks, but he also said that the number of customers still routinely writing checks is "low." The percent of customers already actively using their loyalty cards, Savner said, "is in the high 80s."

Reducing credit card transaction fees "is certainly a benefit" for Pathmark, he said.

Pathmark is working with HSBC Finance and the Tempo payment network on the trial.