After you take the self-serving fluff out the press release, there is some news as HSBC and Loyalty Lab form an alliance. Loyalty Lab formed an alliance with HSBC Finance Corporation’s card and retail services business to extend advanced loyalty and customer retention marketing (CRM) capabilities to retailers that offer private label and co-branded credit cards through HSBC. There is one problem with the “alliance” as we see it:

After the customer’s payment is ‘lost in the mail’ or more commonly ‘received one day after the due date’ there will be no loyalty whatsoever. If HSBC was smart they would sell HSBC Finance to Loyalty Lab, finance it for them, and change the name. Perhaps a spin-off is in order. Just sell them the basics, and get a personal guarantee from everyone.

Mark H. Goldstein, Chief Executive Officer of Loyalty Lab said “Linking loyalty programs directly to the payment mechanism makes the most sense for consumers and the merchant. By working together, merchants will get faster integration and gain broader program capabilities.” The problem is the payment mechanism is broken. HSBC’s pay-for-performance mindset and ongoing compensation paid to merchants makes trust in HSBC Finance’s (formerly Household International) payment processing questionable at best.

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