Xbox rolls out its first ever co-branded credit card image credit: shutterstock.com

In the US, Xbox has launched a Mastercard credit card, issued by Barclays. While it is not the first entertainment enterprise to do so, the move will increase its attractiveness to new and existing customers.

GlobalData’s 2023 Financial Services Consumer Survey asks respondents why they chose their most recent credit card. The top response among US customers was because the provider offered the best reward programme, with 46% of respondents selecting this response. In addition, 35% of customers did so because they already had another product with the same provider.

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The new card’s APR rates range from 20.99–31.99% based on customers’ credit score. The no-annual-fee card provides customers in the US with points on both gaming and everyday purchases. The points can be earned for purchases on selected Xbox store items, streaming services, food delivery services, and more. New customers are given a bonus 5,000 card points (a value of $50) after their first purchase, with all customers benefiting from exclusive perks on games and add-ons that Xbox offers.

Unsurprisingly, both the points earning and spending systems are based mainly around purchases on Xbox products with customers earning 5x card points on eligible Microsoft store products. Customers also earn 3x card points on streaming services such as Netflix and Disney+, as well as food delivery services such as GrubHub and DoorDash. Xbox is hoping these multiplied spending points on products it believes are popular among its audience, alongside points on everyday spending, are enough to entice players to join its new scheme.

Xbox leverages CaaS model

Xbox’s announcement is the latest to leverage the cards-as-a-service (CaaS) model that allows enterprises to launch and manage card programmes without the traditional obstacles that come with traditional credit cards. Xbox’s console competitor, PlayStation, released a Visa credit card offering in 2017, and customers of the Microsoft brand have been without a similar offering for the past six years.

This will allow Xbox to catch up and strengthen its relationship with customers. This also gives it a chance to offer its customers more personalisation and improve customer retention based on data insights they receive from their spending. Furthermore, Xbox will benefit from better cashflows with customers able to make payments over longer periods of time, giving the brand upselling and cross-selling opportunities to customers who use its card.

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Harry Swain is an associate analyst at GlobalData