CommBank Reduces Award Program Partners, Impacting Customer Flexibility

What's Happening?

CommBank is set to significantly reduce its award program partners starting October 1, 2025. Currently, customers can transfer their CommBank Awards points to 12 airline and 3 hotel loyalty programs. However, the bank will limit these options to Virgin Australia Velocity, with Qantas available for an additional annual fee of $90. This decision removes popular airline and hotel partners, affecting travel and shopping redemptions. The move is seen as a cost-saving measure, possibly influenced by the Reserve Bank's planned reduction in interchange fee caps, which could devalue rewards points. Experts suggest that the decision may also be driven by Velocity's desire to eliminate competition from other airlines.

Why It's Important?

The reduction in CommBank's award program partners is significant for customers who value flexibility in their loyalty programs. By limiting options to Velocity and Qantas, customers may face higher costs and fewer reward seats. This change could lead to dissatisfaction among cardholders who previously transferred points to a variety of programs, such as Krisflyer or Asia Miles. The decision may also prompt other banks to reconsider their partner options, potentially reducing customer choice across the industry. As CommBank once boasted the broadest airline partner lineup, this shift marks a notable change in the competitive landscape of bank loyalty programs.

What's Next?

CommBank cardholders with active balances are advised to act quickly, as transfers to certain partners will close at the end of September. Customers may need to assess whether the remaining options, Velocity and Qantas, meet their needs. Those seeking broader flexibility might consider alternatives like Amex Membership Rewards, which offers a larger network of partners. The industry will watch closely to see if other banks follow CommBank's lead in reducing partner options, or if they maintain a diverse range of choices to attract customers.

Beyond the Headlines

The decision by CommBank to reduce its award program partners raises questions about the future of loyalty programs in the banking sector. As financial institutions face pressure to cut costs, the value of customer loyalty may be compromised. This shift could lead to a reevaluation of how banks structure their rewards programs, potentially prioritizing cost-efficiency over customer satisfaction. Additionally, the move may influence consumer behavior, as customers seek out programs that offer greater flexibility and value.