Safeway has introduced a combined debit card and store loyalty card so that it can pull money directly out of a customer’s checking account without paying the hefty fees it incurs when customers pay with a bank’s debit card, the San Francisco Business Times reports. Those signing up for the program get a new Safeway Club Card that includes the Fast Forward debit feature.
Customers choosing not to carry their Club Card can still pay with Fast Forward debit by using the phone number linked to their loyalty card account and a PIN.
“This is a unique program. It benefits our customers by offering a secure, convenient way to shop and allow them one card for payment, Club Card discounts and ‘Just for U’ discounts,” said Safeway spokeswoman Teena Massingill, according to the Times. “All personal information is kept completely confidential.”
Fast Forward is a separate program from Safeway’s SmartCheck debit program, which doesn’t have the option of punching in the phone number and PIN to pay for groceries.
Safeway’s Fast Forward debit card is only available in Sacramento so far. Safeway also offers an extensive FAQ on the program at its website. Safeway isn’t discussing when the program might expand to other markets, the Times says.
From the customer’s perspective, the money is simply deducted from their checking account. But the Pleasanton, Calif.-based grocer can send it through as an electronic funds transfer, saving substantially on the fees incurred with a bank debit card, according to the Times.
Like a bank debit card, Safeway’s program also has purchase limits.
If successful, Safeway’s Fast Forward debit program will mean reduced revenue for Visa and MasterCard as well as Wells Fargo, Bank of America and other banks, the Times reports. Debit cards are a key source of growth for Visa and MasterCard.
Those using Fast Forward debit to pay for purchases get two points in the grocer’s Gas Rewards program for every dollar spent instead of just one point.
Safeway, led by Chairman and CEO Steve Burd who is set to retire later this year, is not the only retailer creating programs to avoid hefty fees on transactions using bank debit cards, the Times reports. Customers loading cash onto their Starbucks’ gold loyalty card get a free drink or food after 12 purchases.