Overview: Why Rewards Are Targeted
Retail yield features can blur lines with deposit interest. Policy aims to protect consumers and keep funding economics within familiar architectures.
Policy Objectives and Consumer Protection
Objectives include clear disclosures, reduced mis-selling risk, and design patterns that avoid interest characterization for retail features.
Mechanics: Indirect Interest and Marketing
Classification focuses on labels and reward mechanics that mirror interest accruals. Marketing is reframed to avoid rate-like claims.
Compliant Alternatives: Rebates and Discounts
Value delivery via rebates, fee waivers, and loyalty benefits preserves economics without interest labels. Audit-ready statements and daily disclosures improve trust.
Implications for Users, Merchants, Issuers
- Users: expect fewer APY labels, more rebates
- Merchants: define refund paths, automate reconciliation
- Issuers: emphasize short-duration reserves and compliance tooling
Conclusion
Targeting rewards aligns retail design with consumer protection goals. Compliant alternatives maintain user value while clarifying marketing boundaries.